H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum opens 12th edition of Careers UAE

Careers UAE 2012 was inaugurated this by H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, with a strong number of visitors expected to attend this year’s event.

The leading recruitment, training and education exhibition with exclusive focus on Emirati talent, Careers UAE 2012 will run until Wednesday, 7 March at the Dubai International Convention and Exhibition Centre.

Held under the patronage of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, Careers UAE is firmly established as the most influential platform for facilitating career opportunities for UAE nationals across all industry sectors.

A wide range of UAE-based private and public organisations are participating this year, including companies in aviation, banking, oil & gas, hospitality, retail, telecommunications, transport, municipal and government divisions.

“We thank H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, for his continued support of Careers UAE. The importance of this show in showcasing and supporting the Emiratisation programme grows every year and we are delighted with the commitment of blue-chip organisations and institutions participating.

Careers UAE is an exceptional platform for bringing together talent and a broad range of career options in one dynamic environment,” said Helal Saeed Almarri, CEO, Dubai World Trade Centre, organiser of the Careers UAE.

Abu Dhabi Islamic Bank, a top-tier Islamic financial services institution and an industry leader in Emiratisation initiatives, has partnered with Careers UAE once again as platinum sponsor. Waheed Al Khazraji, ADIB’s Head of HR at ADIB said: “We believe that Careers UAE offers huge opportunities to bolster the country’s banking industry with competitive national talents.

ADIB will be offering many job opportunities and insight into our work environment, and the training courses we offer.”

Companies participating at the exhibition represent a broad range of industry sectors include Al Tayer Group, Commercial Bank of Dubai, DEWA, Dolphin Energy, du, Dubai Duty Free, Emirates Airline, Ericsson, Etisalat, General Holding Corporation, National Bank of Abu Dhabi, and investment company Tawazun.

During their fourth consecutive participation in Careers UAE, The Private Office of His Highness Sheikh Majid bin Mohammed bin Rashid Al Maktoum is launching the second instalment of the Majid bin Mohammed UAE Nationals Training Initiative. “Through this initiative, we seek to support the young UAE nationals to successfully take the first steps towards their career future.

It also helps produce a constellation of UAE nationals, who are familiar with the labour market and able to continue success,” said Marwan Juma bin Beyat, General Manager of The Private Office of His Highness Sheikh Majid Bin Mohammed bin Rashid Al Maktoum.

German-based industrial giant Siemens, which has over 180 jobs currently open in the UAE across its energy, healthcare, industrial and infrastructure sectors, will also be showcasing the Siemens Graduate Program, a ‘fast-track’ development path into management level jobs for suitable Masters level graduates.

Erich Kaeser, CEO of Siemens Middle East said, “Finding strong local talent is very important to Siemens as we expand our Research & Development capabilities. By creating R&D hubs right here, we can help build – and access – the human and intellectual capital of the region to help us develop strong, localized solutions.”

International academic institutions, training organisations and professional bodies are also active participants at Careers UAE 2012. British University, the Chartered Institute of Management Accountants (CIMA), TANMIA, Higher Colleges of Technology, University of United Arab Emirates and Zayed University will be offering visitors the opportunity to improve their skills base and gain internationally accredited qualifications.

With innovative activities for students and young career professionals, such as the annual “Lunch with Leaders” and inaugural “Career Builder” business competition adding dynamic interaction to the show, Careers UAE 2012 also hosts a top-level HR Leaders Forum for middle to senior HR management from all business sectors.

HR leaders from some of the top organisations in the UAE such as Dubai Airport, Dufy, Etihad Airways, Etisalat, Ewaan, Microsoft and PepsiCo, will come together to discuss innovative ideas focussing on strategies used by leading regional and global organisations on how to attract, retain and develop talent as well as work toward the improvement of people management.

Also taking place alongside the show is the HR Leaders Forum and Awards are organised by Dubai World Trade Centre and runs alongside Careers UAE 2012, the Emirates’ most established recruitment, training and education event. The three-day conference will offer an unprecedented line-up of industry leaders offering best practice examples on building the leaders of tomorrow, aligning organisational strategies and creating high-performance workforces.

This year also sees the launch of the first HR Leaders Awards, recognising significant contributions within human capital management by individuals and organisations. The awards ceremony will take place on 5 March 2012 where the winners for all 12 categories will be announced.

The AIESEC Leadership Forum runs once again during Careers UAE 2012, helping to empower Emirati youth with the confidence to make well-informed life choices and develop their career goals.


Frontier Stocks Lose in Best Rally Since '91 as Growth Slows

The best start to a year for stocks in two decades is leaving the smallest markets behind, a sign of reduced investor confidence in the least-developed economies.

All eight of the world’s worst-performing equity indexes this year are in frontier countries, where the average stock- market value of $30 billion is about 95 percent less than in emerging nations.

While the MSCI All-Country World Index jumped 11 percent, gauges in Bangladesh and Sri Lanka sank at least 9 percent as interest rates increased. Nigeria’s stock index fell 1.8 percent after union strikes and attacks by Islamic militants. Frontier-nation stocks trade at the lowest valuations since at least 2008 versus emerging-market shares.

Falling valuations reflect concern that growth in the smallest economies, which expanded about 20 percent slower than larger developing nations on average during the past three years, won’t accelerate in 2012. Bank Julius Baer & Co. says the losses create buying opportunities for long-term investors. Ashmore EMM LLC has been cutting frontier-market holdings and Oversea-Chinese Banking Corp. is avoiding the stocks.

“On a purely tactical basis, we have actually reduced exposure in frontier markets,” said Antoine van Agtmael, who coined the term “emerging markets” in 1981 and now oversees about $7.1 billion as chairman of Ashmore EMM in Arlington, Virginia. “The larger, more liquid markets offered relatively more compelling investment opportunities.”

Emerging-Market Rally

The 25-country MSCI Frontier Markets Index increased 2.8 percent this year, trailing the emerging-market measure by about 13 percentage points. Nigeria’s Union Bank of Nigeria, Bangladesh’s Dhaka Electric Supply Co. and Sri Lanka’s Lanka Orix Finance Co. declined more than 29 percent, countering gains in Vietnamese shares including Bao Viet Holdings and Vietnam Dairy Products Joint-Stock Co.

MSCI Inc.’s gauge of shares in 21 emerging countries, which have an average stock-market capitalization of $603 billion, surged 15 percent this year as Brazil reduced its benchmark interest rate to the lowest level in 18 months and China cut banks’ reserve requirements.

A new three-year lending program from the European Central Bank and data showing a rebound in the U.S. job market eased concern that developing-nation exports will slow.

The price-to-reported earnings ratio for the frontier index, comprised of companies with an average market value of $2.6 billion, dropped to 10.7 from 16 a year ago and trades at a 10 percent discount to the emerging-market measure, made up of companies with a mean market capitalization of $12 billion.

‘Macro Risk’

“I would go for quality as opposed to underperformance,” said Vasu Menon, a vice-president of wealth management at Oversea-Chinese Banking, the second-largest financial services group in Southeast Asia. “It’s a year you don’t want to add on another layer of risk on top of macro risk.”

Frontier markets have smaller economies and worse rankings on gauges of business climate and corruption than emerging markets. They also have lower trading volumes, which make it more difficult for investors to sell shares.

The average annual gross domestic product for nations in the frontier index is $118 billion, compared with $994 billion for the emerging-market gauge, according to data compiled by Bloomberg and the International Monetary Fund. Frontier countries have an average ranking of 74 in the World Bank’s ease of doing business index, compared with 70 for emerging markets.

Their mean ranking of 82 in Transparency International’s corruption perceptions index is worse than the 75 average for emerging countries.

Liquidity Trap

Less than $15 million of shares changed hands each day on Sri Lanka’s Colombo Stock Exchange during the past month, compared with $12 billion on the Shanghai Stock Exchange in China, the biggest emerging market, according to data compiled by Bloomberg.


Bahrain banks 'on solid economic fundamentals'

Solid fundamentals will support a resumption of strong long-term economic growth and secure Bahrain’s long-term future as a wealth management centre of excellence, said a top government official.

‘Bahrain remains committed to ensuring that the same core business fundamentals remain in place,’ remarked Economic Development Board (EDB) chief executive Shaikh Mohammed bin Essa Al Khalifa ahead of the Euromoney GCC Private Banking Conference at the Ritz-Carlton Bahrain Hotel and Spa on March 7, which will put wealth management and private banking in the spotlight.

Euromoney, the specialist financial publisher and conference organiser, is returning to Bahrain for the first time in a decade to host a major financial event, which is supported by the EDB and the Central Cank of Bahrain.

‘These are stable and transparent regulation, an open business environment and sustainable growth, exploiting our location between East and West and offering a base from which to access the GCC’s trillion-dollar market.

‘Clearly this event will provide a strong platform to engage with the private banking and wealth management business community and highlight the benefits and opportunities presented by establishing operations in Bahrain.

‘More broadly, the EDB has an extremely active business development programme to attract businesses to Bahrain, including international road shows and hosting events in Bahrain to allow people to see the kingdom for themselves.’

The quality of growth depends more than anything else on the sustainability of the workforce and quality of people and Bahrain’s business sector is supported by the most productive, highly-skilled bilingual national work force in the GCC, he argued.

‘Bahrain is home to a well-educated, able local financial services workforce and of the total workforce of more than 14,300 in the financial services sector 67 per cent are Bahraini, of which 37pc are Bahraini women.

‘In addition to the strength of the regulatory framework and the skilled workforce, we also have a track record of more than 40 years of managing wealth in our financial system,’ he said.

‘We also offer platforms for investment through our thriving funds industry, with more than 2,800 registered funds in Bahrain,’ he said and added we are global leaders in Islamic finance, and this means we can support a broader range of private wealth management needs in the kingdom.

‘We felt that now was the right time and Bahrain the right venue to attract an international audience and we already have around 250 delegates signed up,’ said Euromoney Conferences director of private banking Richard Banks.

‘This is not a big conference but it is an event which will attract quality people and we have representation from as far away as Malaysia, Singapore and Switzerland.

‘We chose Bahrain for this event as the kingdom remains a centre of excellence for wealth management in the Middle East,’ he added.-TradeArabia News Service


Islamic banking set to triumph

Adnan Ahmed Yusuf, Chief Executive Officer of Al Baraka Banking Group and Chairman of the Union of Arab Banks, said that the Islamic banking in the Sultanate will spread and will achieve more than 20 per cent of the domestic banking during the next five years.

Adnan Yusuf revealed in an interview with Oman Economic the interest of ABG to enter the Islamic banking sector in the Sultanate but due to factors related to the policy of the group towards the form of ownership, Al Baraka Group is currently considering the possibility of managing a bank in the Sultanate or engaging in Islamic finance if the new banking laws permit so.

Adnan Yusuf said that the Sultanate’s late entry to the field of Islamic banking is a positive factor, as the experience of Islamic banking has reached a state of maturity and the Omani market will benefit from the experiences of other countries that preceded it in this area.

He believed that the conditions of the Arab banking sector, whether Islamic or the traditional one are in good condition as they are not conflicting with what is happening in the international markets. The European countries, despite the crisis they are currently facing, they will be able to get out of the bottleneck, although it takes time to achieve this.

“For the ABG, we are currently available in 15 countries and we have our own policy in the form of ownership. We have our own way of practicing business as it is a must that the bank that we are collaborating with carries the name of the group and that the administration is in the hands of the group and we have the majority stake in the bank’s capital,” he said.

“We have the desire to assume the management of banks, as we have extensive experience in Islamic banking. We now have 450 branches in various parts of the world in 15 countries and 10,000 employees work in these branches in a volume business of $18 billion. We have the option of managing a bank in the Sultanate, but this is not the only option we have, we have another proposals. We now await the new laws, which are about to be issued in the Sultanate after allowing to practice Islamic banking for the first time and we’ll see whether these laws will allow us to exist across the Islamic finance companies,” he said.

“In general, all the options are on the table for us and for the past six or seven years, we have made studies of the Central Bank of Oman and the views of business on the Islamic banking, therefore our relationship is very old and good in the Omani market,” he said.

“I expect the success of this activity in the Sultanate, as it is known that the Omani people are conservatives and always have the desire of having Islamic banks in the country. I think the mistakes and risks will be less as there is the necessary expertise. It can request expertise in Islamic products and can find them easily, especially as some neighbouring countries to the Sultanate such as the UAE has gained much experience in Islamic banking,” he added. Expectations points out that the rate of growth of the global economy in the current year will reach about 3.4 per cent, and this calls for a kind of optimism despite the presence of many of the negative warnings.

What the world needs now is to restore confidence in the ability of the international financial system to take corrective actions sufficient to remove the fears of investors and to stimulate consumer for spending incentives to attract the owners of cash reserves to invest in the infrastructure of the developed economies.

This will help economies in trouble and will make them work to streamline their programmes that have been developed to solve debt and budget deficits.


Nigeria: First Islamic Bank Begins Business in Three Branches

Nigeria’s first licenced Islamic bank, Jaiz Bank Plc, has commenced full operation of non-interest commercial banking in Nigeria from three branches in Abuja, Kaduna and Kano.

A staff of the bank in Abuja Office said most of the early customers were groups of business institutions and private individuals from different religious persuasions making enquiries as well as opening different accounts.

The officer in Operations Department said the service of the bank was opened to everyone that is interested in the non-interest products.

The introduction of Islamic banking is part of a drive by the Central Bank of Nigeria, CBN, to propel Nigeria’s economy and promote financial inclusion by introducing alternative products. The non-interest regime offers veritable incentives and attractive options for investors.

At its inaugural Annual General Meeting (AGM), Chairman of Jaiz Bank, Alhaji Umar Mutallab said: “The whole idea of the banking option is to bring more people into banking in Nigeria that provides banking without interest.”

Mutallab, who was Chairman of FirstBank, further added: “This kind of banking is for all religions because no religion wouldn’t want to help, especially funding critical project without using interest elements.

Whether it is Christianity or Judaism, every community wants to borrow money without being bugged down with multi-layer interest structure.

“This banking option is a product with a difference. We hope our brothers from the divide will see it as an ethical bank which is not meant to promote a particular religion. It is for all Nigerians and not Muslims alone. Once you have a viable project proposal which is ethical, which doesn’t cater for such things as liquor, gambling etc, it becomes a halal (lawful) project and would be looked into by the bank.”

Islamic banking, also known as participant banking, is banking activity that is consistent with the principles of Islamic law and its practical application through the development of Islamic economics. The system prohibits the fixed or floating payment or acceptance of specific interest or fees like usury for loans of money.


QNB Group moves up 77 places to 114th place amongst the world's top 500 banking brands

The Banker’s Top 500 Banking Brands report was published on 1 February 2012 and featured a number of leading banks and financial institutions from the Middle East and North Africa, most notably QNB Group which rose to the status of the region’s most valued banking brand.

The survey is conducted every year by The Banker magazine, an affiliate publication of The Financial Times in partnership with Brand Finance, the leading specialist in the field of brand valuation research.

In the 2012 survey, QNB leaped five places to become the number 1 brand in the MENA region, and moved up 77 places to 114th place amongst the world’s top 500 banking brands.

The process of assigning value to each brand takes into account the bank’s size, geographical presence, reputation, gearing and brand rating. According to the brand rating calculator used in the survey, QNB is classified as an AA+ brand, or a very strong banking brand.

This rating is independent of ratings assigned by credit rating agencies and represents only the health and future growth potential of the brand in intangible indicators and brand value.

QNB Group was able to deliver outstanding financial results in 2011, driven by on-going expansion across the range of its activities both domestically and internationally along with the adoption of a conservative approach to risk management that resulted in further enhancing the Group’s leading position amongst financial institutions in the Middle East and North Africa region.

QNB Group’s Net Profit for 2011 exceeded QR7.5bn, representing an increase of 32% over 2010, with Total Assets increasing by 35% to reach QR302bn. The Bank was also able to maintain a low non-performing loans ratio at 1.1% of total loans, which is considered the lowest amongst banks in the Middle East and North Africa.

Total operating income increased to QR10.2bn, up by 34% compared to 2010, while Net interest income and income from Islamic financing activities increased substantially, up by 37% to reach QR7.8bn. The efficiency ratio (cost to income ratio) improved to 15.7%, compared to 17.0% in 2010, one of the best ratios among financial institutions in the MENA region.

QNB Group’s capital adequacy ratio also increased to 22.0% in 2011, far higher than the regulatory requirements of Qatar Central Bank and Basel Committee. The Group is keen to maintain a strong capitalisation in order to support future strategic plans.

QNB Group’s market capitalisation also increased by 34% during the year to reach QR96.7bn at year-end 2011.

QNB Group’s leading role in the banking sector and the high quality of its assets, along with its capabilities to achieve sustained growth in all activities, are demonstrated clearly in its credit rating, with Standard & Poor’s, Fitch and Moody’s affirming the Bank’s ratings during 2011, which are among the highest in the region.

Also, Capital Intelligence upgraded the Bank’s Financial Strength Rating from A+ to AA- and affirmed all other ratings in recognition of QNB’s sound financial position, high asset quality and leading role in the banking sector.

In 2011, QNB Group completed the acquisition of a controlling stake of 70% in Bank Kesawan in Indonesia, a deal which boosted the Group’s presence in South East Asia that also includes a branch in Singapore. QNB also launched its operations in Lebanon and South Sudan through the inauguration of its branches in Beirut and Juba.

A fifth branch was also established in Oman, as part of the Group’s strategy to expand its customer reach and provide them with global best practices in banking and financial services. With these expansions, QNB Group currently operates in 24 countries around the world through 334 branches, offices, subsidiaries and associate companies, and 7000 staff worldwide.

In January 2012, the Bank announced a Partnership Agreement with the Morocco-based Union Marocaine des Banques (UMB), with plans to acquire a majority stake of its capital.

A new 5-year strategic plan was also approved aiming to reinforce QNB’s position in the region and establish it as a leading icon of the financial sector in the Middle East and Africa.



Islamic banking draft moots five-member Sharia board

MUSCAT: A five-member Sharia board, exclusive branches for window operation, clear cut segregation of conventional and Islamic banking with separate teams of people and accounts and a 12 per cent capital adequacy ratio are the main highlights of the Islamic Banking Draft Framework (IBRF) presented by the Central Bank of Oman before chief executives of banks in Oman.

CBO has organised a consultative meeting for top officials of banks on January 25 for presenting the draft Islamic banking rules, which the apex bank’s consultants Ernst & Young termed as a ‘unique model.’ The banking regulator is still working on the regulation, and may incorporate changes on the basis of feedbacks from banks, before announcing it. Ernst & Young has advised the CBO on fixing of lending limits, single borrower limit, writing of rule books, procedures for reporting structure for Islamic banks and formation of Sharia board.

Of the five-member Sharia board, three should be experienced Islamic scholars and two should be from relevant field, either a professional in Islamic law or Islamic accounting, chief executive officers of two leading banks, who attended the consultative meeting, told Times of Oman. CBO’s draft regulation also stipulates on separate branches for Islamic banking window operation of conventional banks.

“There needs to be a separate team of people for accounts, information technology, marketing and compliance for Islamic banking line of business. There is also a separate head for Islamic banking. However, the back office support can be common for conventional and Islamic banking.

The whole idea is to create a perception among general public that these are two distinctly different lines of business,” said a chief executive of a bank, who does not want to be named. The draft regulation also insists on a 12 per cent capital adequacy, with a minimum paid up capital of RO10 million for starting window operation.

Another major suggestion for window operation is that funds can be pumped into Islamic line of business by a conventional parent bank, but Islamic banking operation can not transfer money for using it in conventional banking. “This could create problems at the macro-level, at least initially.

For instance, if all banks put together transfer RO1 billion into Islamic banking initially and in case half of the total funds can not be deployed due to lack of demand for credit, then the money can not be transferred back to conventional line of business for effectively deploying in the financial system,” noted another CEO of a bank, who viewed it on a macro economic level.

Another major concern expressed by bankers is the lack of availability of Sharia scholars to become board members of Islamic banking. “Everybody is getting into Islamic banking now. We are talking about 30 Sharia scholars. It is difficult to get people with relevant experience and it is going to be a challenge.

Even the region does not have that many people. This is what we are discussing with the Central Bank of Oman,” noted the official. It is also not clear whether a Sharia scholar can be a member of two boards.

Bankers also expressed their concerns on segregating risk management for Islamic banking line of business from conventional banking. “At the end of the day, risk is the same whether it is Islamic banking line of business or conventional line of business. And therefore, it should be on the parent bank and not separate it for Islamic banking,” noted the banker.

Sources also noted that there will be severe competition, with the imminent entry of two Islamic banks.


Public Bank Bhd posts 3.6% increase in net profit

PETALING JAYA: Public Bank Bhd posted a 3.6% year-on-year increase in net profit to RM877mil for its fourth quarter ended Dec 31, 2011, and cited the improved performance as mainly due to higher net interest and net income from its Islamic banking business.


However, the bank told Bursa Malaysia that that this was partially offset by higher other operating expenses and higher loan impairment allowance on higher loan growth achieved.

Revenue for the quarter under review grew 11.8% year-on-year to RM3.3bil.For its full financial year (FY11), the bank recorded a 14.3% year-on-year increase in net profit to RM3.48bil.Revenue grew 15.6% year-on-year to RM12.76bil in FY11.

The bank said during FY11, it recorded improved earnings mainly due to higher net interest and net income from Islamic banking business by RM464.6mil (8.6%) and higher net fee and commission income by RM87.1mil (8.4%).This was driven by continued strong loans and customer deposits growth.


Kingdom gaining more clout in Islamic finance

As Islamic finance/banking industry is growing at a sky rocketing growth rate of 12 percent – 15 percent per annum, Kuala Lumpur, Dubai, Bahrain and London are chomping at the bit to become the center of the industry, which currently boasts some $1 trillion in assets.

For the moment, Dubai holds the title of Islamic banking hub – but it could soon lose ground, both to traditional competitors like Bahrain, Kuala Lumpur or London or newcomers on the scene like Singapore.

But the country that really laid the foundation and basic infrastructure of Islamic Finance and paid billions of dollars by establishing the prestigious institutes like IDB, ICD and ITFC etc. and spending billions of dollars over last several decades and deserves to be global hub of Islamic finance and banking is Saudi Arabia.

Saudi Arabia, the Gulf’s largest economy and a G20 country, is the strongest and well-deserved contender for the title and has an edge. Its financial clout and the development of the King Abdullah Economic City strengthens the case.

“The only impediment is that it may not be the easiest place to obtain banking licenses especially now, given the plight of the banking industry in Bahrain and Dubai, but Saudi Arabia has always been very cautious.

The Saudi Arabian Monetary Agency (SAMA) guides and supervises the financial sector – that already made Saudi Arabia the safest haven in the world amid the current debt storm.It would be a shame to lose this lifetime opportunity in the presence of prestigious institute like IDB, ICD and ITFC being ideally based and headquartered in Jeddah.

These institutes have already produced scores of talented bankers (in Islamic finance) that are spread now in the entire region and beyond and serving the Islamic finance and banking industry.But this achievement wouldn’t be easy without full government support. With a strike of a degree, this industry could create thousands of jobs for Saudi men and women.

Dubai, despite its liberal policy and religious tolerance, has benefited from government support in creating a regional Islamic finance hub due to a favorable regulatory environment and strong domestic ties to Islam and Shariah.

It has more listed sukuk, than anywhere else.What’s more, Dubai is cosmopolitan and business-friendly enough to lure talent from far a field.The industry is not just limited to providing jobs to bankers but a lot of other support industry also flourishes like law offices, Shariah-complaint insurance companies, leasing and mortgage companies etc.

In the absence of any competition from countries like Saudi Arabia, Dubai will continue to be a major driver for Islamic finance in the near term, as it attempts to recycle the region’s petroleum wealth into real estate, tourism, technology and other anchors of a truly diversified economy.

Dubai’s attractions are many. In addition to glitzy and modern shopping malls, it boasts numerous free zones that allows for 100 percent foreign ownership, 100 percent repatriation of capital and profits, exemption from corporate tax and no import duties.

But its central role in Islamic finance isn’t assured over the long haul.The recent financial crises have severely dented Dubai’s reputation and its financial soundness.

The Islamic finance market, that was once a local affair, deeply rooted in the Gulf region only, is now spread in Far East and Europe and somewhat in the US while Africa still remains a virgin market, offering enormous potential and unlimited opportunities.

Appreciating the potential of this $ 1 trillion and growing industry (expected to reach $2 trillion by 2013), the British government had voiced its determination to issue a sukuk and asked its Finance Ministry to start working on necessary regulatory changes by next year while it issues licenses to Islamic banks.

It has to be noted that sukuk is a $30 billion global industry.In recent years, Islamic finance has grown rapidly across the world, conservatively estimated at 12 percent a year.Malaysia has been strong in the Far Eastern market for the past decade. But now, Asian countries – with tiny Muslim populations – are also looking to join this process.

Japan wants to be the first nation in the G-7 to issue a sovereign sukuk bond – that is, if Britain doesn’t get there first.Among cities outside the Muslim world, London is the strongest Islamic finance center and it leads race to be Shariah capital.

London will give Malaysia and Dubai and the rest of the Islamic world a run for its money, as London has all the strengths of a traditional financial center, from a solid infrastructure to a qualified pool of prospective employees.Singapore, also seeking to attract Islamic capital, has the same lures but to a lesser degree.

London is already enjoying some success as a focal point for international Shariah-compliant investors, with both corporations and countries listing sukuk bonds in Britain.London is also benefiting from New York’s relative indifference to Islamic finance, which removes from the race a traditional long-standing rival for global capital because America’s financial capital or political leadership has a narrower appetite for Islamic assets than other centers.

So far New York investors have shown an interest in Shariah-compliant equities, but not in Islamic bonds or Takaful, (Islamic insurance).Saudi Arabia deserves all credit for its tireless persuasion to make Islamic banking industry in the world.

Saudi Arabia’s task to introduce Islamic banks into conventional banking systems was challenging and tough. Islamic banking is steadily moving into an increasing number of conventional financial systems.It is expanding not only in nations with majority Muslim populations, but also in other countries where Muslims are a minority, such as the United Kingdom or Japan.

Similarly, countries like India, the Kyrgyz Republic, and Syria have recently granted, or are considering granting, licenses for Islamic banking activities.In fact, there are currently more than 300 Islamic financial institutions spread over 51 countries, plus well over 250 mutual funds that comply with Islamic principles.

This industry is currently experiencing growth rates of 22 percent per annum despite a tough investment climate – and this growth trend is expected to continue.This golden opportunity shouldn’t be missed simply because of arrogance or ignorance and this country should get what it rightly deserves.


South Africa all set to introduce Islamic Bonds

Johannesburg: Plans by South Africa’s National Treasury to introduce Islamic bonds are gaining a strong support in the African country, amid expectations the move would help boost the state’s economy.

“I am sure this was at the request of those Middle Eastern countries because SA has a small Muslim population,” Kokkie Kooyman, head of Sanlam Investment Management told Fin24.

The National Treasury has announced plans to introduce Islamic bonds as part of efforts to get a share of the booming Islamic banking industry.

Other financial instruments planned by the Treasury include Mudarabah, a form of investment partnership between banks and businesses that shares the risk and losses.

There is also Murabah, a transaction in which the bank buys the asset then immediately sells it to the customer at a pre-agreed higher price payable by installments.

The Sharia-compliant Islamic finance is not new to South Africa with different banks and investment companies offering these products. Several banks as the First National Bank and ABSA bank offer Sharia-compliant services.

Kooyman said the Sharia-compliant offerings are worth pursuing because the end result or return is the same as that of conventional banks.“The returns are also not much different for ordinary investors,” he said.Islam forbids Muslims from usury, receiving or paying interest on loans.

Transactions by Islamic banks must be backed by real assets — not shady repackaged subprime mortgages and banks cannot receive or provide funds for anything involving alcohol, gambling, pornography, tobacco, weapons or pork.

Sharia-compliant financing deals resemble lease-to-own arrangements, layaway plans, joint purchase and sale agreements, or partnerships.

Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.Analysts opine that offering Islamic bonds will help South Africa lure investments from the Middle East and the Gulf region.

“If people that have been using Islamic banking have been happy all the time, let us have (more) of it,” Steve Meintjes, a senior banking analyst at Imara SP Reid, told Fin24.The banking expert said the introduction of more Islamic finance products into South Africa would enhance the economy.

“The SA economy needs more finance. Islamic banking will enhance the productive capacity of this economy,” Meintjes said.Tom Winterboer, a banking analyst at PwC, noted that Islamic finance products can be accessible to investors beyond the Muslim population.

“It must be a good thing to happen to South African investors. It is a different principle from the domestic finance we have come to know,” Winterboer said, adding, however, that it needed a different expertise.“But South African banks have this expertise.”

Starting almost three decades ago, the Islamic banking industry has made substantial growth and attracted the attention of investors and bankers across the world.

A long list of international institutions, including Citigroup, HSBC and Deutsche Bank, are going into the Islamic banking business.Currently, there are nearly 300 Islamic banks and financial institutions worldwide whose assets are predicted to grow to $1 trillion by 2013.