WORLD - PUBLICATIONS - Sesric : Islamic Finance in OIC Member Countries

www.sesric.org - Islamic finance is emerging as an alternative source of finance in addressing the major development challenges faced by many Organization of Islamic Cooperation (OIC) countries. The global market for Islamic financial services, as measured by the total volume of Shariah compliant assets, is estimated to have reached US$ 1.1 trillion at end-2011. OIC countries, with a collective share of 98% in these assets, continue to be the main actors in the industry’s impressive growth story.
Recently, the global financial and economic crisis of 2008-09 has brought to the forefront a wide range of issues concerning the stability and soundness of the conventional financial system. This has prompted an extensive global re-examination by the international community on the adequacy of the existing international economic and financial architecture and the search for a more enduring solution. In the search for a new architecture, there was a general consensus on the need to restore the financial transactions to their basic function – to provide services that add value to the real economy. This, in fact, represents the very essence of Islamic finance, which can be traced back to the Shariah principles. However, concerns remain regarding the compatibility of Islamic financial principles with the conventional performance metrics. Whether socioeconomic goals like sustainability and poverty alleviation can be reconciled with the goals of profitability and market share is strongly challenged. Although certain Islamic products and practices have been lauded for their potential to advance socioeconomic development in OIC member countries, many still argue that the impact of Islamic finance on the development process has primarily been modest. Particularly the development of Islamic financial products has generally been limited to the re-engineering of the conventional products to meet Shariah requirements. All these factors have contributed to Islamic finance’s missing the opportunity during the recent financial turmoil to promote itself as a sound alternative to the conventional system, which was then on the brink of collapse. Moreover, the recent crisis has highlighted that the Islamic finance industry remains vulnerable to the similar systemic risks as its conventional counterpart, and its quest for achieving authenticity is still a challenging task.
In the light of these observations, the present report examines the contemporary trends in the Islamic finance industry in the OIC member countries and its inherent potential for developing into a mainstream financing alternative to the conventional interest-based system.
Online Electronic Version
Islamic Finance in OIC Member Countries (English)

WORLD - OPINION - Mega bank, stock exchanges and trading platforms

www.btimes.com.my - ISSUES TO CONSIDER: An open letter to Islamic Development Bank president Dr Ahmad Mohamed Ali
DEAR Dr Ahmad Mohamed Ali, president, Islamic Development Bank (IDB) Group;

Asalaam Alaikum,

The Islamic finance world welcomes your comments on the Mega Islamic Bank with much excitement and great sense of anticipation.

“…The ‘Mega Islamic Bank’ comes as an initiative of the Islamic Development Bank in its efforts to address the dearth of senior financiers, the absence of the Islamic tools of stock exchange and the absence of market liquidity between Islamic banks.”

Dr Ali, the Islamic mega bank, working with IDB and industry stakeholders, needs to also include stock exchanges and trading platforms, both Islamic and OIC, as part of the conversation. (source)

INDONESIA - OIC - IDB approves $1.96bn in new projects

www.arabnews.com - The closing ceremony of the 37th annual meeting of the board of governors of the Islamic development bank (IDB) hosted in Khartoum on Thursday was marked by the signing of a number of financing agreements. Under these agreements, the bank will contribute to financing of new development projects in 21 member countries with a total value of $1.96 billion.

According to an IDB source, the list of these countries included Sudan, Turkey, Bangladesh, Chad, Bahrain, Indonesia, Guinea, Mauritania, Uzbekistan, Senegal, Burkinafaso, Tajikistan, Sierra Leone, Cameron, Niger, Mali, Afghanistan, Gambia, Maldives, and Guinea Bissau. (source)

WORLD - CAPITAL MARKETS - OIC/Economy: Unified Islamic stock index to make stock market attractive for Muslim investors

www.iina.me - BAKU (Azerbaijan), 24 Rabi al-Thani/17 March (IINA)-The unified stock index of the Organization of Islamic Cooperation (OIC) will facilitate the development of the financial sector. It will allow the Muslim companies to more actively operate on stock trading. As it is known, the constraints imposed by Sharia law, in fact, excluded many companies from the Muslim countries from the financial business sector.

OIC member-countries intensified the operations to create a single stock index. The Department for OIC affairs under the Turkish Development Ministry, which is one of the most active participants in this process, indicated that the work on the establishment of an Islamic stock index has been conducted for five years. There is growing interest in this process among many Islamic countries. (source)

INDONESIA - OIC TRADE - PTA - Kinnow export to increase with Indonesia

www.brecorder.com - ISLAMABAD: The Preferential Trade Agreement (PTA) signed between Pakistan and Indonesia early this month, is expected to be ratified by the end of March, officials said on Tuesday.

The PTA between the two countries will result into export of kinnows with a huge boost.

The agreement has reduced the tariff rate for kinnows from 25 percent to zero tariff. (source)

WORLD - ARTICLES - Sustainable Growth and Inclusive Economic Development from an Islamic Perspective

The Role of Islamic Finance
in Enhancing Financial Inclusion in OIC Countries

Mahmoud Mohieldin, Zamir Iqbal, Ahmed Rostom and Xiaochen Fu

8th International Conference on Islamic Economics and Finance

Sustainable Growth and Inclusive Economic Development from an Islamic Perspective

Doha – Qatar

18th – 20th December 2011

Source:: http://conference.qfis.edu.qa  also here  (abstract hereunder)

OIC - IDB - Islamic Development Bank Group in Brief (brochure)

download link

WORLD - WORLD BANK - PUBLICATIONS - The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries

Policy Research Working Paper 5920 - Abstract

The core principles of Islam lay great emphasis on socialjustice, inclusion, and sharing of resources between thehaves and the have nots. Islamic finance addresses theissue of “financial inclusion” or “access to finance” fromtwo directions—one through promoting risk-sharing contracts that provide a viable alternative to conventionaldebt-based financing, and the other through specific instruments of redistribution of the wealth among thesociety. Use of risk-sharing financing instruments can offer Shariah-compliant microfinance, financing for smalland medium enterprises, and micro-insurance to enhance access to finance. (more info hereunder or download the paper)

WORLD - GENERAL - ‘Islamic finance Industry too Parochial and insular’

Governors of central banks and monetary authorities of the Organization of Islamic Cooperation (OIC) member countries, meeting at Sasana Kijang in Kuala Lumpur in November under the aegis of the Statistical, Economic and Social Research and Training Centre for Islamic Countries (SESTRIC) and hosted by Bank Negara Malaysia (BNM), could be excused for being pre-occupied with matters pertaining to the euro zone sovereign debt crisis and its impact on member countries. (source)

WORLD - OPINION - EDUCATION / HR - Building a knowledge economy - in the OIC Malaysia, Turkey, Iran and Indonesia scoring well

sananews.net - In this knowledge-driven world, those countries that have invested massively in education, science, engineering and innovation have progressed rapidly. The divide between the rich and the poor today is simply a “knowledge divide” – those countries that have acquired knowledge in cutting-edge fields and used it to invent new products and processes, and other countries which are simply importers of technology. (source)

WORLD - RATINGS - Fitch afrms Islamic Development Bank at 'AAA'/'F1+'

Nov 16- Fitch Ratings has affirmed the Islamic Development Bank's (IDB) Long-term Issuer Default Rating (IDR) at 'AAA' with a Stable Outlook and Short-term IDR at 'F1+'.

The ratings primarily reflect IDB's strong capitalisation. The bank is one of the most highly capitalised multilateral development banks (MDBs) rated by Fitch. The equity to assets ratio has remained above 65% since inception (70.7% at end-1431H, equivalent to 6 December 2010 in the Gregorian calendar). The IDB also maintains comfortable liquidity and compliance with Sharia'h principles induces extremely low leverage (21.3% at end-1431H). (source)

PAKISTAN - ECONOMY - Cabinet to approve PTA with Indonesia

brecorder.com - The Federal Cabinet is all set to approve the 'Preferential Trade Agreement' (PTA) with Indonesia, with the main beneficiary purportedly being edible oil importers.

The meeting will be presided over by Prime Minister Yousaf Raza Gilani, who is scheduled to leave for Australia on Wednesday to attend the Commonwealth Summit meeting.

Official documents obtained from the Cabinet Division suggest that Pakistan and Indonesia signed the Comprehensive Economic Partnership Agreement (CEPA) in November 2005 on the occasion of the visit of President of Indonesia to Pakistan.  (source)

WORLD - TRADE FINANCE - ITFC signs up HSBC as key trade finance partner

CPF FINANCIAL  - International Islamic Trade Finance Corporation (ITFC) and HSBS sign MoU to implement Shari’ah-compliant trade financing

Dr Waleed Al-Wohaib, Chief Executive Officer, International Islamic Trade Finance Corporation

HSBC has signed a Memorandum of Understanding with the Islamic Development Bank’s ITFC on trade finance and to provide help on various treasury activities such as joint trade financing and investment of liquidity. The MoU means ITFC customers will be able to use HSBC’s services to facilitate the issuance of Letters of Credit on behalf of ITFC for customers who import or export goods.

HSBC Amanah, the bank’s global Islamic finance business, is present in seven countries, four of which contribute more than 50 per cent to the GDP of Organisation of Islamic Conference (OIC) member countries. (source)

WORLD - TRADE - Inter-Islamic countries trades booming

International Islamic Trade Finance Corporation (ITFC) inter-Islamic countries trade has risen to 17 pc.

Members of the Organization of the Islamic Cooperation (OIC) are aimed at increasing the trade to 20 pc by 2015, reported Taqrib News Agency (TNA).

Latest surveys announced by the Center for International Islamic Trade Development, affiliated to the Islamic Development Bank (IDB) shows that the trade between Islamic countries has risen to 17pc while the members of OIC are aimed at increasing the number to 20 pc. (source)

WORLD - ICD priorities: Financing of SMEs, food security and housing

JEDDAH: The Islamic Corporation for the Development of the Private Sector (ICD), a multilateral organization affiliated with the Islamic Development Bank (IDB) Group, is currently engaged in tackling issues related to the financing of small and medium enterprises (SMEs), and projects providing food security and housing among member countries.

Aside from SMEs, the ICD is considering the financing of projects for providing food security among member countries on priority.

“We have some member countries having potential for providing food security so that those who do not have such potential could benefit,” ICD’s Chief Executive Officer Khaled Al-Aboodi told Arab News on the sidelines of the corporation’s first clients day held at the Jeddah InterContinental Hotel.

Those with potential include Kazakhstan, Sudan and Indonesia. (source)

WORLD - INDEX - Thomson Reuters sets up Islamic indices

THOMSON Reuters and IdealRatings yesterday launched the Thomson Reuters IdealRatings Islamic Indices, the first Islamic benchmark offering research-based Syariah screening based on globally accepted standards, to investors, money managers and analysts across a range of Islamic instruments.

The indices, which will provide the most transparent Islamic guidelines for investors around the world, will also act as a transaction channel for potential investment to Malaysia. (source)

WORLD - IDB seeks new economic order

JEDDAH: Islamic Development Bank President Ahmed Mohamed Ali called for a new economic order to promote global progress and prosperity at the group’s annual conference here Monday.

“I call upon Islamic financial institutions to make use of the available opportunity to establish international investment banks in order to present a new vision and a different methodology to the world in asset management and fund investment … and contribute to the reform of global financial system and stability,” Ali said at the event, which attracted the participation of over 1,000 delegates including ministers, economists, businessmen and bankers. (source)

SINGAPORE - Singapore officials rue low understanding of Islamic finance among investors

It has almost become a ritual that there has to be some sort of announcement either by the government, regulator or a financial institution at international conferences on Islamic finance. 

Singapore is no exception. Not surprisingly, Lim Hng Kiang, Minister for Trade and Industry, who is also the Deputy Chairman, Monetary Authority of Singapore (MAS) (the financial regulator), announced a few days ago at one such conference in the island state that Singapore will in due course issue new income tax regulations for Islamic finance to provide greater tax clarity and certainty to the industry. (source)

TRADE FINANCE - Islamic trade finance seen lifting growth of sector

DUBAI, June 9 (Reuters) - Islamic trade finance has benefitted from shifting preferences towards Sharia-compliant banking and could serve as one of the key growth drivers to help the nearly $1 trillion Islamic finance industry double in size.\

The global Islamic finance industry, which has been growing between 15 to 20 percent a year, is widely expected to reach $2 trillion in the next three to five years. (source)

ECONOMY - Trading block for Muslim nations possible, if united

A strategic trading block for Muslim nations under the auspices of the Organisation of the Islamic Conference (OIC) is possible, provided they are united.

Speaking at the Muslim World Biz 2011 gala dinner here in Kuala Lumpur, Minister in the Prime Minister’s Department, Tan Sri Nor Mohamed Yakcop, said despite being endowed with much of the world’s economic resources, Islamic countries are still poor and left behind.

OIC countries generate just 7.2% of the world’s GDP and 10.4% of global exports.

“We must take cognizance that the past lacklustre performance of Islamic nations had, to a large extent, been due to the failure to develop consensus and teamwork.
“In this respect, we welcome the increasing connectivity and collaborative partnerships through economic cooperation platforms,” he said. (source)