Asia presents huge developmental potential for Islamic finance and is likely to be the main driver of Islamic banking growth in the near future given the untapped potential in India, Bangladesh and Indonesia, according to a report. Islamic finance can be utilised for greater integration of financial markets with the real economy and for improvement of the economic balance between emerging and frontier markets, according to Kuwait Finance House Group report. Islamic banking is banking that is consistent with the principles of Sharia which prohibits acceptance of specific interest or fees for loans of money.
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.
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.
Central banks from seven Muslim countries yesterday launched a regulatory body to oversee the booming Islamic investment market. The Islamic Financial Services Board (IFSB) was inaugurated here by founding members Malaysia, Saudi Arabia, Indonesia, Iran, Kuwait, Pakistan, Sudan and the Islamic Development Bank.
Iran holds 40 percent of total assets of Islamic banks around the world, an expert said.
Irna news agency quoted the Egyptian professor, Saeed Vafaiee Tadroos, as saying that according the ranking of the "Asian Banker" magazine; seven banks of 10 largest Islamic banks are Iranian.
Promoting the capital market and using Islamic financing mechanisms are the top priority of the government, said minister of economic affairs and finance.
Speaking at a seminar titled 'Securing Finance Through Sukuk', Shamseddin Husseini pointed out that global Islamic financing mechanism stood at $1.2 billion in 2000 but this figure increased to $58.5 billion in 2010, reported IRIB News.
The talk is big, but are potential sukuk originators walking the walk? Depending on who you speak to, the picture is mixed, marked on the other hand by the “irrational” exuberance and ambition of potential issuers, many of whom do not get near to an offering, and on the other hand those who are skeptical and indifferent based on an erroneous belief that sukuk origination is always more expensive than conventional bonds and is further complicated by the Shariah compliance requirement.
Takaful Insurance companies around the world especially in the Middle-East, North Africa and South Asia have set a target of $12billion USD premium generation from takaful insurance for 2011 as the demand by Muslim populations across the globe for the products are on the rise. Takaful insurance operators at the sixth Annual World Takaful Conference held in Dubai predicted a $12 billion USD premium income from Takaful insurance this year. The $12billion projected premium from takaful insurance represents 31 per cent increase from the $9.15 billion income generated from the Islamic products in 2010
Ali Saleh-Abadi, The President of Iranian Securities and Exchange Organization (SEO) announced that SEO ratified issuing sukuk, Islamic bond. On 13 March 2011, Mahan Airline issued Sukuk with the value of IRR 291 billion in Farabourse (Iran's OTC market) to finance its network developmental projects for the first time in the Iranian Capital Market.
The Iranian deputy oil minister said that the ministry plans to issue Islamic sukuk bonds made available for the first time for the littoral Persian Gulf states and Middle East countries.
The Mehr News Agency quoted Mohsen Khojasteh-Mehr as saying that the oil ministry plans to diversify its financial resources and one means of doing this during the Fifth Socio-Economic Development Plan (2010-2015) is to publish bonds.