A report prepared by Kuwait Finance House Research Ltd (KFHR) said on Friday that ‘sukuk’ (Islamic Sharia-compliant bonds) has witnessed a sharp increase of 300 percent since the start of this year reaching in total $40 billion. The annual report by KFHR, a branch of Kuwait Finance House (KFH), said that last May of this year witnessed an increase in global sukuk, 22.4 percent when compared to April of last year, reaching $four billion.
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Top Islamic banking officials will meet in Singapore this week to discuss ways to revive an industry which has stalled as interest in new markets cool and legal uncertainties cloud the role of sukuk as funding tools. Once touted as a viable alternative to traditional banking, Islamic finance has failed to make a mark outside its core markets as countries from Britain to Hong Kong and Australia put on hold sukuk issuance plans and proposed regulatory changes to accommodate sharia banking. Ireland has launched a bid to become the home of Islamic finance in Europe as it seeks to rebuild its once dominant financial services sector. The taoiseach, Enda Kenny, who was swept to power on a wave of public anger at the taxpayers' €70bn (£62bn) bailout of failed banks, told the Irish Funds Industry Association (IFIA) that he was doing everything he could to "ensure" Dublin became "a centre of excellence for Islamic finances". 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 Governors and representatives from 12 central banks and two multilateral organisations signed on Monday the articles of agreement for the establishment of the International Islamic Liquidity Management Corporation (IILM). The signing ceremony was the highlight at the opening ceremony of the Global Islamic Finance Forum. As a global initiative aimed at assisting institutions offering Islamic financial services in addressing their liquidity management in an efficient and effective manner, the IILM would facilitate greater investment flows for the Islamic financial services industry. More domestic currency denominated Islamic bonds are needed in the Gulf Arab region -- where sukuks tend to be in U.S. dollars -- to boost issuance and develop domestic markets, Islamic banking executives said. As liquidity returns to the Gulf and demand for sukuk increases with improving capital market conditions, regional players are actively looking for domestic investments to manage their liquidity. Arshad Khan, the chief of the Bahrain Financial Exchange, had envisaged a global Islamic trading platform when he set out to work with Malaysia's stock exchange this year. Though the talks fell through, Khan thinks there may be other partnerships in the future, reflecting a desire to collaborate that could help close an age-old divide between the two regions which has impeded the growth of Islamic finance "The agreement (with Malaysia's stock exchange) is still there and we're still exchanging information," Khan said. "We can still create synergies later on." Islamic bonds in the Persian Gulf are returning six times more this quarter than in the previous three months as Dubai-based companies restructure debt and economic growth in the region accelerates. Sukuk sold by the six-country Gulf Cooperation Council have returned 2.9 percent since June 30, compared with a 0.5 percent gain in the second quarter, according to the HSBC/NASDAQ Dubai GCC US Dollar Sukuk Index. The average yield on the debt narrowed 0.83%, in the past six weeks to 6.65% and reached an eight-month low of 6.49% on Aug. 3, according to the HSBC/NASDAQ GCC Index Gulf Arab states may have a single Shariah board for the region's Islamic financial institutions by 2013 to standardize the industry and increase services available to Muslims, a Shariah scholar said. Gulf Arab countries need a supreme Shariah council to give the industry a direction, because we would be concentrated less on proving other Shariah scholars wrong and more on using the Shariah to create more products, said Hussain Hamed Hassan, who heads Dubai Islamic Bank's shariah committee. Kuwait Turkish Participation Bank (Kuwait Turk) will launch a $100 million (Dh367.3m) sukuk within the next two to three months, with a roadshow set to focus on the GCC, Emirates Business has learned. The Islamic bond is currently being finalised. Proceeds will be used to boost the bank's capital and fuel expansion plans, said Rahim Albayrak, Senior Executive Officer of the bank's subsidiary in the DIFC. |