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 Dr Ali Mohiyuddin Al Quradaghi, one of the top sharia scholars in the Gulf Cooperation Council (GCC) on Islamic finance, has mooted the need for the establishment of an institution that could certify and standardise the different Islamic products in the market. Add Comment  Global Islamic insurance contributions surged 19 percent in 2010 to $8.3 billion helped by Saudi Arabia, the world’s biggest oil exporter, which made up more than half the industry, an Ernst & Young report said. The six-nation Gulf Cooperation Council, which also includes the United Arab Emirates, Qatar, Bahrain, Oman and Kuwait, made $5.68 billion of Islamic insurance or takaful contributions in 2010, and South East Asia $2 billion, according to the World Takaful Report 2012 e-mailed today.  Oman’s economy is robust and expected to grow by 5 percent this year, the Gulf Arab country’s central bank head Hamood Sangour al-Zadjali said on Wednesday, adding that the country may issue sovereign debt of 200 million rials ($518 million). “The local economy is in an excellent condition. We expect growth of 5 percent this year. Inflation is under control, somewhere between 3.5 to 4 percent,” the sultanate’s top banker told Reuters on the sidelines of a banking conference.  Leading industry players, thought leaders and key regulators in the international Takaful (Islamic insurance) industry will take part in the 7th Annual World Takaful Conference (WTC 2012), which is set to be held in Dubai on April 16-17, 2012.
The two-day event, co-located with the 2nd Annual Middle East Islamic Finance and Investment Conference (MEIFIC 2012), will feature critical discussions on successfully tackling the challenges of an increasingly competitive global Takaful market and will analyse practical strategies that can effectively translate market potential into real growth.  Oman’s Capital Market Authority (CMA) has revealed to The Times of Oman that it will favour standalone Takaful companies, which is against the window operations proposed for conventional banks.
"It looks like CMA may not allow window operations (of conventional insurance firms), rather allow standalone companies because conventional insurance is completely different from Takaful insurance. Most of our advisors are in favour of a separate entity," Abdullah bin Salem al Salmi, Acting Executive President of Capital Market Authority, told Times of Oman. He added that the minimum capital for promoting a Takaful insurance company is envisaged at OMR 10 million.  Omani consumers have expressed a strong appetite for Islamic finance with a rapid take-up of banking products expected within the first 12 months of being launched.
These are key findings published yesterday from Oman’s first independent market study, entitled ‘Islamic Finance in Oman – Sizing the retail market’.  Standard & Poor’s (S&P) is currently reviewing credit ratings on 50 banks in the Middle East and North Africa under a revised set of criteria. Such move could result in a higher funding costs for lenders, already hit by the Arab Spring revolts.
The agency which previously drew a weak credit profile for United Arab Emirates lenders, expects more activity in debt capital markets as bank lending struggles.  Oman's new regulatory and legal framework for Islamic banking and finance should be completed by the end of this year. "We are building a legal and regulatory framework in consultation with the banking community. This is headed by a Special Committee who has been working on this with a top international consultancy firm for the last six months to come up with the appropriate framewrok," explained Hilal Ali Saud Al-Barwani, vice president, Banking Control and Legal Department, Central Bank of Oman, in an interview.
 Issuers in Gulf countries face rising refinancing risks over the next three years amid a significant increase in maturing debt to 2014, Standard & Poor's has said in a new report.
The rating agency said experts estimate bonds and sukuk worth about $25bn will mature in 2012, rising to about $35bn in 2014.  Oman may in future consider issuing Islamic bonds or sukuk, the country's central bank head Hamood Sangour al-Zadjali said on Monday.
Zadjali was speaking at a financial forum in Kuwait. Oman opened its doors to Islamic banking in May this year, after previously deciding not to introduce it. | 
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