Wednesday, October 29, 2014

The UK means serious business in the Islamic finance world, announces new initiative


Islamic Finance news Alert

Wednesday, 29th October 2014

S&P 500 Shariah
Dow Jones Islamic World
MSCI World Islamic
FTSE Shariah All World
Russell - IdealRatings Islamic Global
1,748.28
2,827.88
1,150.60
2,022.16
1,814.60
21.53 (1.25%)
32.98 (1.18%)
(1.12%)
24.40 (1.22%)
16.31 (0.91%)


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UK: Building on the success of its inaugural Sukuk program, the UK is moving progressively in its efforts to anchor itself as the leading Islamic finance center for the western world as its economic secretary to the Treasury, Andrea Leadsom, spells out further initiatives towards that ambition.

Leadsom yesterday revealed that the sovereign’s export credit agency, UK Export Finance (UKEF), is working towards extending Shariah compliant support to British exporters in the coming months. UKEF expects to provide Shariah compliant guarantee for Sukuk to be issued by an Airbus customer, making it not only the first time UKEF would provide such support but also marks the first Islamic debt issued for the aviation sector to receive UKEF’s aid.

Commenting on this initiative, Leadsom said: “A key part of the government's long-term economic plan is making Britain the western hub for Islamic finance and the undisputed center of the global financial system. The UK has already created one of the most attractive regulatory and tax systems for Islamic finance anywhere in the world, and the huge success of the UK's sovereign Sukuk earlier this year was a significant milestone in the development of the global Islamic finance industry.”

In addition to UKEF’s impending move into the Islamic capital markets, the UK’s central bank, Bank of England, also reaffirmed that it is considering establishing Shariah compliant liquidity management instruments to assist domestic Islamic banks in meeting their liquidity obligations, a move welcomed by both the economic secretary and industry players. Support from the Bank of England is expected to bolster the operations and capacity of UK’s Islamic banks in providing a more diverse range of services and products to customers.

The commitment demonstrated by UK authorities resonates well with wider industry efforts (see IFN Report Vol. 11 Issue 14). Last week the UK Chartered Institute of Public Finance and Accountancy (CIPFA) held its inaugural Islamic finance roundtable which saw the attendance of the HM Treasury, local authorities, banks and law firms. Believing that local authorities and other public bodies should examine other potential borrowing options in order to diversify the funding pool, CIPFA has committed itself to facilitate work with Islamic finance providers in order to explore Shariah compliant products as a viable source of local government funding.

These developments are indeed encouraging as it proves that the UK does mean serious business in the Islamic financial space beyond the highly symbolic Sukuk issuance, and more importantly, it keeps the momentum built by the inaugural Islamic debt program going strong. It will be exciting to see how it pans out for the UK.


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Today's IFN Alerts


MALAYSIA: Malaysia's prime minister backs creation of an Islamic megabank

UAE: DIFC Investments plans meetings with fixed income investors for potential benchmark Sukuk issue

KAZAKHSTAN: Kazakhstan to decide on sophomore Sukuk issuance by the end of the year, according to central bank governor

MALAYSIA: Minister highlights Islamic finance as an integral pillar for the development of Malaysia's finance industry in 2015

TURKEY: Turkish regulators to engage bankers at the Turkey Dialogue in conjunction with IFN Turkey Forum on the 6th November

GLOBAL: Sukuk for infrastructure financing total US$95 billion over the last decade, according to Malaysian central bank governor

GLOBAL: Sukuk industry likely to maintain double-digit growth, says DIFC governor

GLOBAL: New collaboration between Malaysia and the UAE focused on capacity building for Islamic capital market

OMAN: Islamic banking assets reach 4.4% in Oman after two years of operation, concludes report

UAE: Government support needed for the further development of Islamic finance in Dubai, according to industry head

MALAYSIA: Maybank Islamic to invest RM20 million (US$6.11 million) in new Waqf Fund

GLOBAL: Hamdan Bin Mohammad Smart University and Universitat Oberta de Catalunya launch world's first online Executive MBA in Islamic Banking and Finance

UAE: Dubai Financial Market reports 85% leap in third quarter net profit

SAUDI ARABIA: Saudi Electricity Company announces 46.38% hike in net profit for the first nine months of the year

BAHRAIN: Bahrain Islamic Bank sees net profit for the first three quarters soar 74% to BHD6.6 million (US$17.13 million)

SAUDI ARABIA: AlAhli Takaful Company's third quarter net profit surge 476.54% to SAR8.16 million (US$2.17million)

MALAYSIA: MARC assigns a rating of 'AA-IS' to forthcoming RM8.4 billion (US$2.56 billion) Sukuk from Jimah East Power

MALAYSIA: No ratings action taken by MARC on Kimanis Power's RM1.16 billion (US$354.46 million) Sukuk following plant delay

UAE: Sanjeev Dutta to lead DMCC Tradeflow from November















REDmoney events


IFN Turkey Forum 2014
6th November 2014 (Istanbul)

IFN Saudi Arabia Forum 2014
17th November 2014 (Riyadh)

IFN Africa & Egypt Forum 2014
8th December 2014 (Cairo)

IFN Indonesia Forum 2015
22nd April 2015 (Jakarta)

IFN Asia Forum 2015
25th-26th May 2015 (Kuala Lumpur)

IFN Europe Forum 2015
9th-10th June 2015 (Luxembourg)

IFN Issuers Forum 2015
13th September 2015 (Dubai)

IFN Kuwait Forum 2015
5th October 2015 (Kuwait City)

IFN Iran Forum 2015
2015 (Tehran)

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Application of Islamic Principles in Shariah Fund Management
13th November 2014 (Kuala Lumpur)

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17th - 19th November 2014 (Dubai)

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17th - 19th November 2014 (Kuala Lumpur)

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1st - 3rd December 2014 (Kuala Lumpur)

Takaful: Concepts, Products and Operation
8th - 10th December 2014 (Kuala Lumpur)

Advanced Sukuk & Islamic Securitization
15th - 17th December 2014 (Dubai)

Funds Transfer Pricing
15th - 17th December 2014 (Hong Kong)

Fixed Income Products & Bond Markets
9th - 10th March 2015 (Kuala Lumpur)

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