UK and UAE complement each other on Islamic finance

uk and uae flagsDubai: On her visit to the UAE to promote London as a hub for Islamic finance, Senior Minister of State at the UK’s Foreign and Commonwealth Office Baroness Warsi welcomed Dubai’s initiative to be the global centre of Islamic economy, saying that the two countries “absolutely” complement each other in this regard.

Read more at : http://gulfnews.com/business/economy/uk-and-uae-complement-each-other-on-islamic-finance-1.1229955

source : Gulfnews

Islamic Finance in Europe – Occasional Paper by European Central Bank June 2013

European Central Bank (ECB) has published occasional paper about Islamic Finance in Europe in June 2013. 74 pages document contains many facts, figures and research articles about Islamic Finance in Europe. This paper will be useful for academics, students and researcher who want to do research about Islamic finance industry in Europe.

Link for the paper : http://www.ecb.europa.eu/pub/pdf/scpops/ecbocp146.pdf

The Times Islamic Finance supplement

The UK based times news paper have issued 16 pages Islamic finance supplement focusing UK Islamic finance market. The supplement has been created by Raconteur Media 16 pages analysis of different topics including the market, education, regulation and global trends. This is a good resource for those are involved in Islamic finance industry practitioner or researcher.

The major topics include :
– Challenging the banking ‘fat cats’
– Alternative funding for cash-starved UK firms
– Doing the right thing can be profitable
– Reaching out to UK customers by daring to be different
– Global rise of Islamic finance
– Public works projects need financial kick-start
– Home truths for Islamic mortgages
– Funding for affordable homes
– Finding a way to train future professionals
– Task force set to show UK is open for business
– Comparing standards is an interesting problem
– Pursuit of excellence must sweep away conflict of interest
– Islamic banking and finance: perceptions and expectations

Link for the article
http://theraconteur.co.uk/category/finance/islamic-finance/

Why did the Vatican suggest Islamic finance? by İsmail Özsoy*

Professor İsmail Özsoy is an instructor at Fatih University’s department of economics.

Just after the 2008 global financial crisis hit, the Vatican suggested using the Islamic finance and banking system as a solution. So then what does Islamic finance offer? To answer this question we had better first lend an ear to the saying of the Prophet Muhammad: “You should sell gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, and salt for salt, like for like, equal for equal, and hand-to-hand; if the classes differ, then you may sell as you wish, provided that the exchange is hand-to-hand.”

With this concise saying, the Prophet Muhammad expresses exactly 80 kinds of exchanges, which are the exchange of a commodity for another commodity or a currency for another currency on credit or on the spot and for matching or different quantities of goods. According to that Prophetic saying, out of these 80 kinds of exchanges, 46 sales bear a religiously forbidden “interest.” Interest is a value that is transferred from one party to another without a matching value given back. Interest is sometimes “unearned income” in a zero sum game and sometimes “unequally distributed income” in a positive sum game. Thus, interest is, in any case, a wrong done to one of the two parties in loans or exchanges. That is why it is condemned by all religions and criticized by most philosophers.

Read more Todays Zaman
http://www.todayszaman.com/news-307052-why-did-the-vatican-suggest-islamic-financeby-ismail-ozsoy-.html

Fitch rates Turkey’s USD Sukuk ‘BBB-‘

Fitch Ratings has assigned Hazine Mustesarligi Varlik Kiralama Anonim Sirketi’s (Hazine) USD1.5bn of global certificates (Sukuk), due 26 March 2018, a ‘BBB-‘ rating. The certificates have a profit rate of 2.803%.
Hazine, an asset leasing company incorporated solely for the purpose of participating in this transaction, is wholly owned by the Republic of Turkey, acting through the Undersecretariat of the Treasury.
The rating reflects Fitch’s judgement that the Sukuk can be considered an unconditional, unsubordinated and general obligation of the Republic of Turkey, ranking equally with Turkey’s other senior unsecured obligations. The rating is therefore in line with Turkey’s Long-term foreign currency Issuer Default Rating (IDR) of ‘BBB-‘ on which the Outlook is Stable.
The Sukuk follows an ijara’ (leasing) structure. The issuer has purchased publicly-owned real estate from the Republic of Turkey using the proceeds from the Sukuk. These assets have been leased back to the Republic for a period equal to the tenor of the Sukuk; in return the Republic makes semi-annual rental payments to the issuer at least equal to periodic distribution amounts made by the issuer to the Sukuk investors.
The transaction documents incorporate a purchase undertaking requiring the Republic to repurchase the assets on maturity (or earlier, in the event of dissolution/default), together with any outstanding distribution. Certificates are unsecured and certificate holders have no direct recourse to the lease assets.
While certain transaction documents relating to this issue, being governed by English law, may not be enforceable under applicable law, including Turkish law, Fitch’s rating for the certificates reflects the agency’s belief that the Republic of Turkey would stand behind its obligations under the transaction documents.
By assigning a rating to the certificates, Fitch does not express an opinion on the Sukuk structure’s compliance with Sharia principles.
Source: bne

A Detailed Look at the Fast-Growing Islamic Banking and Finance Sector

Press release
September 26, 2012
Hoboken, NJ
A Detailed Look at the Fast-Growing Islamic Banking and Finance Sector

The severity of the global financial crisis that followed the years 2008 and 2009 has been described as second only to the Great Depression. Yet, during those two years, the assets of the 500 top Islamic financial institutions grew — from $639 billion to $820 billion.

What sets apart the Islamic finance industry from the rest of the financial world? And how have its differences helped this sector thrive when the rest of the global financial market struggles to regain its balance?

Faleel Jamaldeen, author of Islamic Finance For Dummies, says: “I’m bullish on Islamic finance: I’m a firm believer in the market potential of this industry. I’m also a firm believer in the benefits of Westerners understanding the concepts that lie behind the Islamic financial products — knowing why a separate industry exists and why many conventional products don’t work for Muslims.”

“In the West, the general public and even many financial professionals know absolutely nothing about Islamic finance. Those who’ve at least heard of it may assume that they can’t understand or participate in it because they aren’t Muslim and don’t speak Arabic.) Western women may assume that they aren’t allowed to participate in the Islamic finance industry because of misconceptions about Islamic law. (Women can and do fully participate in Islamic finance — as professionals and as investors.)”

“Islamophobia is a prejudice against Islam or Muslims that has unfortunately become more commonplace and more intense in the West since the attacks on the United States on September 11, 2001. Some people simply don’t want anything to do with an industry that’s affiliated with Islam. Until now, searching for a book to help you navigate the subject of Islamic finance wasn’t very rewarding. That’s because Islamic finance has been the topic of textbooks but not many nonacademic titles.”

Jamaldeen goes on to say, “I wrote this book to bridge the gap between people who need and want to know about Islamic finance and an industry that needs and wants their participation. You’ll find that you don’t need to learn a new language, change your personal religious views, and that job prospects are strong for both men and women with conventional banking and finance skills who are open to learning about new products and a new way of conducting business.”

“I wrote this book assuming that you have a strong interest in the financial industry already. Maybe you’re a banker, a mutual fund manager, an investment consultant, or an insurance agent. Perhaps you have Muslim clients asking you to consider adding sharia-compliant products to your roster of offerings, or your boss mentioned in passing that Islamic finance has been growing like crazy and your company should find out how to tap into the market. Maybe you’re a college student focusing your studies in finance, and you’ve read that job prospects are good for people with specific knowledge about Islamic finance.”

Whatever the scenario, you’ll find clear and easy-to-understand information on how the Islamic finance industry works.

source : wiley.com

Aircraft investment, Islamic finance key to growth: Boeing

source : traveldailymedia

Boeing Capital Corporation ‘BCC’ stressed on the need for airline to invest strategically into new aircraft and the long-anticipated growth of Islamic financing’s role in commercial airplane deliveries is also coming to fruition. Airplanes have been regarded as ideal for lending under Shariah law given their mobile nature and asset attractiveness.

These discussions were highlighted as financial institutions and airlines in the Middle East have significantly increased their capital investments in new Boeing commercial airplanes over the past two years, thus realizing substantial rewards for their investors as demand for new airplanes continues to expand.

“The region historically has seen about 20% of its deliveries funded by its own capital sources. That turned up to more than 30% in 2011, and, for 2012, it’s heading to nearly 60%,” said Rich Hammond, a BCC senior director in the region.

Read more : http://www.traveldailymedia.com/138359/aircraft-investment-islamic-finance-key-to-growth-boeing