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
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Turkey’s first Islamic fund, run by Istanbul-based brokerage Bizim Securities, is seeking to attract more investment from the Persian Gulf with its Shariah-compliant stock index. The Istanbul Stock Exchange started an Islamic gauge of 30 shares on Jan. 6. Bizim, whose parent company Boydak Holding owns shares in companies including an Islamic bank, is planning to raise 100 million Turkish Liras and through investments set to begin in the second half of 2011, Deputy Chief Executive Avşar Sungurlu said in an interview last week. The lowest relative yields on Islamic bonds in more than two years may encourage issuers to tap the market after a 15 percent drop in new sales in 2010, helping revive interest among investors. The difference between average yields for emerging-market sukuk and the London interbank offered rate narrowed to 282.7 basis points yesterday, the least since August 2008, according to the HSBC/NASDAQ Dubai US Dollar Sukuk Index. Albaraka Banking Group BSC, Bahrain’s biggest publicly traded Islamic lender, plans to sell Islamic bonds in the first quarter, while Albaraka Turk Katilim Bankasi AS, a Turkish Islamic bank, may make an offering this year, company officials said this week. Turkey’s Istanbul Stock Exchange on Thursday launched an index comprised of 30 listed companies that comply with Sharia banking principles as the country seeks to attract interest in its burgeoning Islamic finance sector. The Participation Index will include discount retailer BIM , Turk Telekom , the main landline operator and builder Enka Insaat , said Avsar Sungurlu, deputy CEO of Bizim Securities, which is consulting for the index. Interest-free pension funds have been making inroads into Turkey ever since the requirement necessitating holding at least 30 percent of Treasury bills and bonds in investment portfolios was lifted in 2008. After the establishments of participation banks, interest-free pension funds were next in line. The Capital Markets Board (SPK) lifted the requirement that 30 percent of the funds in the pension funds pool should be in Treasury bills and bonds. 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. “The Islamic fund industry needs to evaluate new strategies to restimulate growth. Islamic fund assets remained flat in 2009 at $52 billion, whereas the potential wealth pool grew by 20 percent, now estimated at $480 billion,” concludes the Islamic Funds & Investments Report (IFIR) 2010 which was published by international auditing and advisory firm Ernst & Young in September 2010. Turkey's Treasury said on Friday it would sell up to 1.76 billion lira ($1.17 billion) worth of revenue-indexed bonds, an Islamic-style debt issue, as it continues to diversify and broaden its investor base. The coupon payments of the bond will be indexed to revenue transfers to the Treasury from state companies such as Turkish Petroleum Corporation (TPAO), State Airport Authority (DHMI), State Supply Office (DMO) and Coastal Safety (KIYEM). Islamic loan volume exceeded $5.66 billion (Dh20.78bn) in Saudi Arabia during the May 2009 to May 2010 period, according to different research data.
The loan volume in Qatar was the next highest at $2.75bn, followed by the UAE at $900 million, Bahrain at $540m, Turkey at $306m and Kuwait at $293m. The European Union’s largest and strongest economy, Germany, is finally edging toward facilitating Islamic finance in its jurisdiction. Germany has a Muslim population of 4.3 million, the second largest Muslim population in the EU after France with 5.5 million. Reports from Germany stress that the country’s banking regulator, the Federal Financial Services Authority (BaFin), has issued a limited banking license to Kuveyt Turk Participation Bank, one of Turkey’s four so-called participation (Islamic) banks. Kuveyt Turk is majority-owned (62 percent) by Kuwait Finance House, one of the largest Islamic banks in the world in terms of capital and assets. The Islamic Development Bank (IDB) also has a 9 percent stake in Kuveyt Turk Participation Bank.
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