By Shveta Pathak, Business 24-7 on Tuesday, April 28, 2009
Sukuk market in the Gulf needs to be regulated, say analysts 

The Gulf can foster growth in Islamic bonds (sukuk) market by adopting regulations and going in for measures such as credit rating, say analysts. Even as the GCC holds a lion's share in the global sukuk market, estimated at $130 billion (Dh477bn), it lags behind when it comes to regulations. And a model like the one followed by Malaysia can help it tap the massive potential that the segment holds, they said."The GCC market holds a significant share of global market when it comes to volume. But if we talk of a regulated market, the comfort levels of having prudent policy guidelines from regulators are still not there, whether it is related to type of issuances or ratings," said Moinuddin

Malim,  Head of Corporate and Investment Banking, Badr-Al-Islami. Mashreq.Malaysia, with its proper regulatory measures and incentives, has managed to create a success story of its sukuk market and "investors from various countries such as Korea and Japan too are going there to issue sukuks".

"Rating for sukuks in Malaysia is mandatory. Besides, they have created a platform to quote sukuks on a daily basis so people would know the fair value of the instrument," said Dr Mohd Daud Bakar, Managing Director, Amanie Islamic Finance Learning Centre.

"The government in Malaysia has also incentivised issuances when it comes to the taxation aspect of it," he added. "From the day of issuance to redemption, everything is clear."Credit enhancement structures in bond market can be used for sukuks as well and these should be studied, said the analysts.

The region should focus on tapping into the opportunities after the market downturn and learn from other successful markets, they added."Sukuk is important when it comes to overall financial market. The region, with its huge capital needs, but a small debt market needs to look into opportunities," said Kamal Mian, Head of Islamic Finance, Saudi Hollandi Bank.
 

The Malaysian Reserve Tuesday, March 17 2009
Amanie Lends A Hands in Maiden Kazakh Sukuk

A Malaysian based consulting firm is involved in launching the maiden Shariah-compliant fund and sukuk in Kazakhstan, a former Soviet republic which had just recently passed the legislations necessary for the development of Islamic finance.
Amanie Business Solution Sdn Bhd, an Islamic finance consulting outfit based in Kuala Lumpur, is working closely with Kausar Consulting from Kazakhstan in structuring the two products in what is surely one of the first few Islamic finance instruments being developed in the Commonwealth of Independent States (CIS) region. CIS' countries

include former Soviet Republics, including Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Turkmenistan, and Uzbekistan. Together with Western China, the region is said to be home to some 100 million Muslims. "Some of the work may be done out of Kuala Lumpur," said Amanie consultant Razi Pahlavi Abdul Aziz. Amanie, led by respected Islamic finance scholar Dr Mohd Daud Bakar who also chairs the Shariah Advisory Council of Bank Negara Malaysia, has been involved in assisting Kazakhstan in putting in place its Islamic finance regulations. On Feb 12, Kazakhstan president Nursultan Abishuly Nazarbayev signed into law amendments to allow for the introduction of the Islamic banking system in the republic. The document is called "On introduction of amendments and supplements to certain legislative acts of the Republic of Kazakhstan concerning the issues of organisation and activity of the Islamic banks and organisation of Islamic financing". "The working group for developing this law was created in mid-2007," said Kausar Consulting managing partner Yedige Alpysbay. It consisted of representatives from local banks, the Agency for Regulation and Supervision of Financial Markets and Financial Organisations (FSA), National Bank of Kazakhstan (the central bank) and consulting firms specialising in Islamic finance including Kausar Consulting.[Read More]
 

The Malaysian Reserve on Feb 23, 2009
Amanie Launches Shariah Stock Screening

Investment managers who need to select and monitor Shariah compliant stocks now have a new tool at their disposal. Amanie Business Solution Sdn Bhd, a Malaysian-based Shariah advisory company, has launched a Shariah stock screening service that can be employed to screen stocks according to multiple methodologies and is not restricted to any one proprietary method of screening. The service will target new entrants into the Islamic fund management industry. There is currently an influx of conventional fund managers managing Shariah funds as investors have shied away from investing in conventional funds in the wake of the global financial crisis, the company said in a statement. The launch of the Amanie Screening was held at the end of the half-day seminar entitled "Potentials and Opportunties in Islamic

 Asset Management post-2008 Global Financial Crisis" organised by the company in Kuala Lumpur last Wednesday. Amanie Screening aims to provide "the never before available element of flexibility" in terms of screening methodology used to allow clients to choose from a number of Shariah-complaint screening methodologies available in the market, the company said. It also caters for portfolio screening based on the specific needs of the client.[Read More]