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 Qatar, world’s biggest natural gas exporter, is planning to issue Islamic bonds “Sukuk” for the first time ever, as it has sent a request for proposals to banks and is close to mandating arrangers, report said on Wednesday. “The sukuk is expected sometime in the second quarter, before the summer break”, the sources said. Add Comment  On a recent sunny day, Eric Swats, a fund manager at Rasmala Investments, sat under a parasol at a restaurant on the terrace of the Dubai International Finance Center, talking up his new $25 million Rasmala Global Sukuk Fund. Mr. Swats hopes it will tap into fast-growing demand from Middle Eastern and Asian investors for sukuk, securities that comply with Islamic law. “The market for conservative and well-managed” Islamic finance products is “underserved and underdeveloped,” he said over a lunch of salad and fruit juice.  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.  James Caan made his millions in the recruitment and headhunting business and his claim to fame was his starring role as part of a BBC show which strived to find the latest and hottest new business models. As a result, he is an expert at delivering the perfect pitch and getting his message across. In the Gulf to announce his latest move into the world of Islamic finance, it soon becomes clear Caan knows exactly how to combine his latest business campaign with some headline grabbing soundbites.  With local banks constrained to provide financing for the FIFA World Cup to be hosted in the country in 2022, could a Qatar-incorporated Islamic megabank step in to help stem a projected liquidity squeeze?
Islamic Finance news understands that the long-awaited megabank, touted by Saudi businessman Sheikh Saleh Kamel of the Al Baraka Banking Group, will likely be set up in Qatar by the end of this year, following initial expectations that the bank would be established in Bahrain or Malaysia.  Growing trade in Islamic bonds in the Gulf region this year could be driven further by increased private sector interest in Sukuk on the back of strong activity by banks, the 51st ACI Financial Markets World Congress will be told in Dubai this weekend.
Nick Stadtmiller, Head of Fixed Income Research at Emirates NBD, said over $6 billion of Sukuk have been sold by GCC entities so far in 2012 compared to issuance of $7.3 billion for all in 2011, with the UAE’s Majid Al Futtaim Group paving the way for more private sector involvement in Islamic finance through its recent Sukuk sale.  Qatari banks performed well in 2011 and are projected to record double-digit growth in their net profits this year due to rise in domestic credit, according to a Kuwait investment bank.
“For 2012, we forecast a 20.4 per cent increase in the net profit of Qatari National Bank (QNB) while for Commercial Bank of Qatar growth is expected to be 19.2 per cent and Doha’s to be 12.6 per cent….for the two Islamic banks, growth is expected to be 14.5 per cent,” Global Investment House (GIH) said in a study.  Conventional banks in Qatar will not be allowed to invest in sukuk, or Islamic bonds, following the closure of their Shariah-based windows, International Monetary Fund has said in its country report.
An IMF team, which visited Qatar late last year said the QCB had informed the International Monetary Fund’s Qatar mission that “conventional banks would not be allowed to have Islamic subsidiaries, and they would not be allowed to invest in sukuk.  HSBC Qatar said yesterday it has converted its Islamic branches into conventional ones as directed by Qatar Central Bank (QCB) but declined to divulge details about customer accounts of the now-closed Islamic windows.
A senior bank official said here yesterday that since the matter was ‘sensitive at this stage’ he would not like to comment. Fadi Fattal, head of commercial banking of HSBC, said: “We would prefer not to comment on the issue as it’s a bit of a sensitive issue at this stage. But we gave options to our ‘Amanah’ (the bank’s Islamic banking operations) customers. Whoever wanted to convert their account into conventional one has done that and those who did not, have closed their accounts with us.”  Swaziland is reportedly considering the establishment of the country’s first Islamic bank, with Qatar National Bank (QNB) said to be a frontrunner for its set up.
The move is significant in two ways — Firstly, in that it would mark the African nation’s entry into Islamic finance; and secondly, it could help Qatari conventional banks such as QNB to circumvent orders to shut down their Islamic operations last year. | 
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