IG Issue34 Mashreq Tcm38-60564

8/3/2019 IG Issue34 Mashreq Tcm38-60564

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Ethics into insuranceR

atings ecy

sdrd & Poor

yeerdy ued

repor o he e of

he lobl tkful dury.In the reprt, An analysis

of Shariah compliant coopera-tive and Takaful insurers in the

Middle East focused primar-ily on nancial strength, theagency cmmends the grwthf the glbal Takaful sectr andthe fact that in key markets itis cmpeting strngly with thecnventinal insurance indus-try, and in many ways winningthe battle fr hearts, minds andpremiums frm Muslims andnn-Muslims alike.

Hwever, S&P des framethis praise with the caveat thatin sme key markets ntablySaudi Arabia and Malaysia

which have natinal plicies tprmte Islamic nance that theTakaful industry has been takingn the cnventinal insurancesectr with a lt f backing.

The reprt als says that thistrend is likely t emerge in thercuntries, especially in the Gulf,

where Qatar recently frcedcnventinal banks with Islamic

windws t shut their Shariahcmpliant business, and: inthe UAE and Kuwait, [where]all the insurance licenses issued

in recent years have been Takaful

nes. It is nt knwn whetherthere were any requests fr new,cnventinal insurance licenses

but the result has been t leavenly a limited number f tradi-tinal cmpanies t cntinue tperate in thse cuntries

The grwth f Takaful in theMENA regin, S&P claims, has

been a direct result f the rlef bancassurance, where retail

banks (bth cnventinal andIslamic nes) have been bltingn insurance cvers t their

bank accunts and sme nanceprducts.

In the MENA regin es-pecially the GCC many banksdnt knw the religius r ethi-cal persuasin f their custm-ers, s S&P argues, and whereasffering Takaful insurance cvert a nn-Muslim is nt a badthing, and smetimes Takafulffers a better deal t plicyhld-ers than cnventinal insurance;

ffering cnventinal insurance

t a Muslim is a blunder, asthis amunts t enticing him t

becme invlved in a number fHaram activities. S, the banksin the GCC regin have beenerring n the side f cautin,and selecting Takaful prvid-ers rather than cnventinalinsurers fr their bancassuranceprducts.

The reprt calls int questinthe sustainability and stability fthe Takaful industrys businessmdel, which can smetimes

be seen as encuraging excessivepremium expansin alngsideexpsure t religiusly accept-able, but ptentially vlatiler illiquid investment assets ntably shares and real estateTw f the specic risks in theTakaful industry as interpreted

by S&P in the reprt were the in-dustrys fee structure and rmsexpsure t vlatile and illiquidassets, where decisin making

was made n a religius basis, as

ppsed t a nancial and riskmanagement basis.

David Anthny, credit analystfr S&P, tld The Islamic Globe:Beynd the need t makeadjustments t the accunts, wehave general cncerns regardingthe Takaful mdel. Fr instance,

the Wakala fee is levied as a xedpercentage f grss premiums

written, and this raises the pssi-bility f mral hazard. A Takafulperatr culd be encuragedt maximize the incme fsharehlders by increasing theamunt f premium and there-fre risk being written.

The accunting difculty,S&P explains, arises frm thecntracts that Takaful rmsuse t transfer incme and levycharges. In the rst instance, the

Takaful rm can nly transferincme t sharehlders thrugha Wakala cntract, whereas itcan nly charge fees fr assetmanagement thrugh a Mudara-

bah cntract. In sme dmiciles,there are strict regulatinsdealing with the prt-sharingf the Takaful peratr, such asin Saudi Arabia, where there isa statutry 90:10 prt sharerelatinship between sharehld-ers and plicy hlders. In therdmains there is n statutrymandate, such as in Iran where

Takaful perates n a lse mu-tuality agreement.

The lack f glbal standardshas caused prblems, as sme

LoNDoN-based prpertyfund manager, Grsvenr FundManagement has entered inta jint venture with Kuwaits

biggest Islamic bank, KuwaitFinance Huse, t invest 380m($585m) in US healthcareprperties.

The Islamic Globe reprted

back in July that KFH hadre-entered the US marketthrugh a $450m JV with UDRIncrprated, a real estateinvestment trust.

The KFH-UDR JV has sfar made a $43m acquisitinf an apartment building in

Silver Spring, Maryland. Thissecnd Nrth America-fcusedJV with the US arm f a UKfund manager shws that KFHintends t increase its ftprintin the US market, pssiblyhping t take advantage fecnmic uncertainty and a realestate apcalypse t pick up

sme undervalued bargains.Grsvenr Fund

Management will versee allinvestment activities, includingsurcing, underwriting,structuring, nancing, clsing,asset managing, and exiting thepartnerships investments, all f

which be Shariah cmpliant.other KFH JVs include

ne with Canada Pensin PlanInvestment Bard t invest inLndns West End fce marketver the next tw years and theacquisitin f a prtfli f furretail prperties in Sweden andtw shpping centers in France.

KFH did nt respnd trequests fr cmment andGrsvenr was nt availablefr cmment by the time thenewspaper went t press.

Grsvenr has 3.8bn($6.0bn) f assets under manage-ment in its real estate prtflis.

Kuwait Finance House in tie-up with Grosvenor

INSIDEP3 TURKEY AND MALAYSIAS

ENTENTE CORDIALE

P5 LETTER FROM AMERICA: IFCS

BROKEN PIPELINE

P6 EDITORIAL: WHATS WRONG

WITH SIMPLE?P8 NEWS ANALYSIS: SUKUK

SALAD DAYS

P10 ABOUBAKARS FRUITY

ORANGE JELLY

Continued on p3

Issue 34 www.theislamicglobe.com october 5, 2011
http://www.theislamicglobe.com/http://www.theislamicglobe.com/


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he Islamic Globe october 5, 2011 3

F

rom ast t wst

vyn wants a

slic f Tuky. Last

wk at t sa

ti t cunty was sting aUK businss dlgatin ld by

businss sctay Vinc Cabl,

malaysias Islaic nanc big

guns w in Ankaa and Istan-

bul stting ut n t nw silk

ut in Islaic nanc.

The Islamic nance on-slaught comes after muchdiplomatic handshaking at thehighest level earlier this year

when both countries announcedthe lifting of travel visas and thetwo prime ministers agreed that

a free trade agreement shouldbe signed by the end of 2011.

Malaysia wants to exportits Islamic nance expertiseand experience, while at thesame time opening up its ownmarkets to investment fromemerging players like Turkey.Right now the Malaysia-Turkeydtente looks like a win-winsituation.

Speaking in Turkey, BankNegara Malaysias deputygovernor, Muhammad Ibrahimlaid out a roadmap with ve

waypoints to building closer eco-nomic, social and strategic ties

between Turkey and Malaysia.One battering ram the Ma-

laysians are deploying toget into Turkeys markets isIslamic nance and its hopedthat this cross-pollination willenhance the already $1.35bn

worth of bilateral trade the twocountries do.

Some of the tools he outlinedwere cross-border Sukuk issu-ances, the development of col-laborative Islamic fund manage-ment products, and Malaysianinvestment in innovation, andresearch in Turkey.

Abdullah Gl, Turkeysmoderate Islamic president,has been dithering on a much-outed issue of sovereign Sukukand Turkeys four participation

banks, the majority of whichare GCC-owned, account for

only 5% of the ercely-secularcountrys banking assets.

The worlds mostcomprehensive and tested[Sukuk] infrastructure, saidIbrahim, could be used byTurkey to raise funds for largeinfrastructure projects such asthe building of the Bosphorusshipping canal, while the depthof Islamic funds in Malaysia

should interest the Turkishbanks as Malaysia offersdiversication opportunities

with high prospects for thedevelopment and distribution ofShariah compliant funds across

borders.On other fronts ISRA was

offered up as a Shariah researchcollaborator while INCEIF wasput forward as a training andeducation partner.

Some Malaysian Islamicbanking industry players have

said that this is the beginning ofMalaysia exporting its nationaland institutional Islamic nanceexperience, with one saying thatthe Malaysian model is not justabout the domestic Malaysianmarket any more, and theindustry collectively has enoughexpertise and experience to helpdevelop the needs of new anduntapped emerging markets.

scholars view traditional con-ventional insurance as Shariahcompliant because of the inher-

ent risk-sharing nature of itsbusiness, whereas other scholarsrule that a Takaful rm is onlyShariah compliant if it allocates100% of its prots to policy-holders. In different domainsthis interpretation varies fromrm to rm and S&P calls on

AAOIFI and the IFSB to col-laborate to make one global ac-countancy standard and policyon prot sharing.

The report argues that wherethere is uncertainty the tempta-

tion is there to inate Wakalafees, which in the spirit of Taka-ful are there to cover the rmsoperational costs, to generateprots for shareholders, in effectgetting the policyholders to paythe shareholders. Firms also hold

back surpluses as a hedge againstinsolvency, but sometimes thesesurplus funds become very largeand technically should be redis-tributed to policyholders.

The opaque nature of aTakaful rms book-keeping,

juggling between Wakala,Mudarabah and surplus funds,means that the managementcan often arbitrarily transferfunds to shareholders. This S&P

believes is not just inappropri-ate conduct but could have adetrimental effect to the rmsunderwriting. In addition, theprot taking is often written offas an operating expense, whichit is not and gives Takaful rms,at an analytical and ratingslevel, an unfair advantage overconventional insurers.

The compounding of theseissues led Anthony to the con-clusion that the Takaful industryneeds to apply sound corporategovernance. He said: While theneed to be Shariah compliantmay encourage overexposureto religiously acceptable, butpotentially volatile or illiquid as-sets, most of these issues can beaddressed or even eliminated byapplying sound corporate gov-ernance, backed up by effectiveenterprise risk management,

predictable regulation, transpar-ent accounting, and an efcientinternal audit function.

Ultimately, therefore, it willbe more the principles of man-agers and management and lessthe structure of operations that

brings ethics into insurance.

The Pakistan SeC and rgis-

ta f mdaabas av c

tgt t ty and bst t

ftuns f t industy.

T tw institutins

appacd t tad bdy

tat psnts t mdaaba

sct, t mdaaba

Assciatin f Pakistan, t ask

w t gulats can n

tun t uls tat gvn t

industy s tat it can ac

ut t nw custs andntpiss.

Javd hussain, gista f

mdaabas, tld The Islamic

Globe: T cnsultativ p-

css is aid at invlving all

t staklds. T viws f

t paticipants will b takn

int accunt f xtnding t

full suppt f acclating

gwt f t sct.

Bas Cwdy [above],

caian f t mdaaba

Assciatin, xplaind t tis

nwspap tat uc f t

discussin vlvd aund

nancing t taining and

cticatin f t intnal

nancial and Saia audits

witin t mdaabas, said:

t paticipants agd t

nanc t siz and iag f

t sct tug innvatin,

utual cpatin and pfs-

sinal cptnc.

As pviusly ptd inThe Islamic Globe [Issue 32]

t mdaaba sct, wic

piaily pats pviding

Ijaa-basd plant lass t t

Sme sct in Pakistan, is n

f t fastst gwing scts in

nanc in t cunty. JF

A slice of turkeyContinued from front page

Ethics intoinsurance

Regulators seek to grow Modaraba sector

EAA

On trend: Industry

descends on Turkey


4/12
http://www.mashreqalislami.com/


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he Islamic Globe october 5, 2011 5

LETTER FROM AMERICA

BLAKE GOUD [email protected]

the lbl cl

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Canada was nt entirely

immune t the effects f theslump, but its banks held upmuch better than banks in theUS and Eurpe, s it is ntsurprising that a public-privatepartnership t prmte appliedresearch n issues relating tnancial risk management

wuld cme ut f that cuntry.What is surprising, given the

small size f the Islamic nanceindustry in Canada is that thisinstitutin, the Glbal Risk In-stitute (GRI), which was incr-prated at the beginning f 2011

wuld lk t turn its sights nthe Islamic nance industry.Hwever, that is just what theGRI is cnsidering, accrdingt Dnald Hathaway, the GRIspresumptive president andCEo, wh is yet t be elected bythe bard f the institutin.

While the deliberatins arejust starting, Hathaway sharedhis persnal views with TheIslamic Globe, n leading thecharge t put Islamic nancen the agenda. Islamic nance

is a strategic issue and willbe n the agenda fr the new

bard as sn as it is frmed,cmmented Hathaway.

Many Islamic nancialinstitutins bth in the

west and in the GCC havefcused n real estate, andgiven the nancial straits thatmany prminent institutinsexperienced, a fcus n riskmanagement is srely needed.

If the GRI includes Islamicnance n its agenda, the fcus

wuld be n Canada at the start;the membership f the GRI

includes the Big Five banks,life insurance cmpanies, asset

managers and the three largestpensin funds in Canada.

Several f these institutinsperate internatinally,including in markets whereIslamic nance is prevalent.

Hathaway indicated that thefcus wuld be n research tilluminate discussin and plicy.The fcus n risk managementis starting with the cuntry

whse risk management andprudential regulatin seemst have wrked the best, s

hpefully their example will ntbe pushed t the side.

Juggling the risks

IB part of new global financial order IFCs brokenpipelineBACK in May f this year, a spkesper-sn fr the Internatinal Finance Cr-pratin tld The Islamic Globe that the

IFC was hping t issue a Sukuk everycuple f years.Their last Sukuk was issued in 2009

and they were building a prtfli fassets t back the Sukuk. Hwever, whencntacted recently, a spkespersn frthe IFC said they did nt expect a Sukukissue any time sn.

Tipping the balance: Canada steps up to the global stage and ocuses on risk management

DR. ad md al

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If the GRI includes

Islamic finance on

its agenda, the focus

would be on Canada at

the start


6/12

october 5, 2011 The Islamic Globe

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Instead it seems that the industry is fcused n the prduct siden a tiny sliver f a small segment f the Muslim ppulatin, the highnet wrth individual r ultra high net wrth individual. And f cursethe elusive and secretive family fce and institutinal investr.

on the lending side as well its hard t nd cmpetitive and seriusprducts that lan mney t individuals, r nance the entrepreneursthat run small- t medium-sized businesses. Instead the industry

seems t want t deliver Sukuk fr multinatinal il cmpanies, rreal estate rms wh want t erect fanciful, verpriced glried busi-ness parks and luxury ats. By and large the industry is nt lendingmney t the factry wner in Delhi wh wants t buy r lease smeindustrial equipment r the cmmunity leader wh wants t buildsme basic, but affrdable huses in Yemen.

Instead the Islamic nance industry giants are, much like a urryf lemmings stampeding twards blivin, trying t create a Shariah-

wrapped private wealth management and investment banking mdelbased n the system that is cllapsing in the US and Eurpe. It hasbeen this way fr years, but mnumental cllapses like UnicrnInvestment Bank r Gulf Finance Huse, t name a few, have taughtthe industry nthing, and there seems t be little change in businessmdels, persnnel r prduct develpment.

There is scant demcratizatin in Islamic nance, nr universalitynr altruism. But nly a fl wuld think that a business like Islamicbanking is there fr the purpses f philanthrpy.

Hwever, that desnt mean that news f the develpment f anIslamic hedge fund shuld be greeted with a standing vatin. Wh isthis prduct fr? The term Islamic hedge fund is in itself an xym-rn and althugh the ne in questin is technically a tracker withinan Islamic wrapper, when it rst launched in a pre-credit crunch2007 it did nt attract a great deal f interest. The bank behind itnw hpes that it will meet with a much mre favrable reactin inthe middle f a glbal recessin. Hwever, with a minimum invest-ment f $25k, the vast majrity f the banks regular custmers willnt have enugh mney t invest in this fund.

Islamic hedge funds are nt new. The Dubai gvernment sunk$200m in a suite f alternative asset management prducts in2009 and since then things have been very quiet n that frnt. otherIslamic hedge funds have been lst withut a trace, but prductmanufacturers are still trying t cme up with the Glden IslamicHedge Fund Egg fr their UNHWI clients as well as mre extic realestate prducts and mre private equity.

All these prducts are aimed fr a very narrw segment f themarket and persnally I dnt think thats where the actin is. Africais a very new market fr Islamic nance the same as suthern Asia.Its in places like this where Islamic nance has captured the imagina-tin f the masses and there is a reasn fr that. Its because the banksand nancial institutins there have lwered their sights frm themega-wealthy t average mrtal and whse business mdel is basedn lts f small fees n small accunts, as ppsed t a few big feesfrm a few big accunts.

Surely Islamic banking is abut simplicity and sustainability andwhat drew me t the sectr was that it was refreshing, purprtedt be based n ethics and was trying t slve prblems in a simple,mral and transparent way. Simplicity dened.

S mre pwer t the Pakistani Mdarabas and savings schemes fSudan, because this is where the future is nt in trying t cmpete

with discredited Swiss Banks and Wall Street titans, as that is just alse-lse scenari.

[email protected]

By John Foster

Whats wrongwith simple?

eagLemont meDiaDUBai LonDon meLBoURne

BRUnei

John FosterManaging Editor & Founder

[email protected]+44 7540 268 784

Paul McNamaraEditor, Founder & [email protected]+971 505743263 or+61406309736

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Contributors:Emmy Abdul AlimShabbir KazmiFlaviah KoyesigaSteve Mbogo

The Islamic Globe is a weeklynewspaper published by EaglemontMedia FZ LLC and is a registeredtrademark and service mark o theEaglemont Media Group and itsafliated entities.

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Learning rom the euros mistakesoNCE upn a time, lng, lng ag there was exciting talk f theCmmn Market, a club f the rich cuntries f Eurpe. The dream

was t have a cmmn currency and the remval f trade barri-ers between Eurpean cuntries. Many years later it all came tpass and much f Eurpe became lumbered with the eur. Whatthe architects f the dream culd nt have freseen was that theEurpean Unin (sn f Cmmn Market) wuld welcme basketcase cuntries int the eurzne and that when ne f them went

bust the entire zne wuld suffer frm cntagin. Many years laterthe wise men f the Islamic nance wrld cntemplated a similarscheme in the frm f a Cmmn Islamic Dinar while equally wisemen cntemplated a Gulf Cmmn Currency. It seems that the wisemen had learned nthing frm past mistakes and were cndemnedt repeat them. And thats the end f the stry.

t Pulr

Across1 Give out (4)3 Goods that all under Riba ruling [IF] (6)6 Waiving Islamic doctrine in case o

human welare [IF] (8)9 Ruling on uncertain event [I] (7)

11 Deposit guarantee [IF] (5)13 Arabian sailing vessels (5)16 Type o video fle ormat (3)17 Tribal leader (5)18 Option to cancel a contract [IF] (6)

Answers t The Puzzler will be available frm octber 10 at

www.theislamicglbe.cm. Please send an email t the [email protected] fr a chance t win a cpy f Case Studies

in Islamic Banking & Finance by Brian Kettell

Down2 Contract to sell an asset in

the uture yet to be created[IF] (7)

4 A Divine Ruling [IF] (5)5 Welare Loan [IF] (4,5)6 Swedish urniture shop (4)7 Operatic song (4)8 One leg on either side (10)10 Nearest galaxy (5,3)12 A lawul object or trade

[IF] (5)14 CoE Priest (5)15 The science o Shariah

[IF] (4)
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7/12
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8/12

october 5, 2011 The Islamic Globe

the sukuk rk,

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ilc cdury, b

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fr p w yr: prdc-

v lrly prvd

crrc d ll-fudd.

But it lks as if Sukuk mightbe nce again abut t havetheir day in the sun as the Gulfuses the bnd-type instrumentst deal with enrmus piles fdebt and expansin pprtuni-ties.

Taqa, the Abu Dhabi Na-tinal Energy Cmpany, has

set up a $1.1bn medium-termnte prgram denminated inMalaysian ringgit f RM3.5bnt appeal t Malaysian investrs as a means f diversifying itsfunding surces.

Accrding t a statementled by Taqa n the ADX: onceapprpriate regulatry apprvalis received, the prgram will al-lw Taqa t issue quickly if and

when the market cnditins areptimal.

Malaysian investrs have

shwn remarkable lyalty t

Islamic nance instrumentsdenminated in their wncurrency and this has nt gneunnticed in the Gulf.

Dubai hme nance cmpa-ny Tamweel is said t be lkingat a $300 t $500m Sukuk inQ4 this year accrding t its act-ing CEo Varun Sd, speakingn the sidelines f Cityscape aDubai prperty exp. The issueculd be denminated in USdllars r Malaysian ringgit.

Hme nance cmpanieshave tried funding their businessthrugh issuing Sukuk in thepast with mixed results. There isa high risk invlved in securingshrt-term funding thrughSukuk with a tenr f ve tseven years and then lending frthe purchase f residential units,typically with a tenr f 25 years.

The mismatch in the tenrs f

assets and liabilities can havedisastrus results.

Als in the UAE, Nakheelhas been using Sukuk fr smeyears and the cmpany is still inthe prcess f issuing Sukuk asa frm f part-payment t tradecreditrs. Readers fThe IslamicGlobe will already have heard allabut the mted Sukuk frmKSAs il industry in the frm fa $1bn (SAR3.75bn) issue frmSaudi Aramc and the Frenchpetrchem grup Ttal.

It seems the issuer has nwset an initial pricing guidelinefr the issue, which will be at

six-mnth Saudi interbankffered rate (Saibr) plus 95 t105 basis pints.

The issuer will be an SPVcalled the Saudi Aramc TtalRening and Petrchemical C(SAToRP) and prceeds will

be issued t nance the Jubailrenery prject.

Deutsche Securities SaudiArabia, Samba Capital andSaudi Fransi Capital are jintlead managers and jint bk-runners fr the issue.

Meanwhile ver in Dha,

Qatar Internatinal IslamicBank has indicated that it is

planning t issue a signicantlysized Sukuk. Althugh the bankhas been cy abut the precisesize f the issue, it is likely t beseveral hundred millin dllars.

Lcal player QNB Capital,the investment banking wing fQatar Natinal Bank, StandardChartered and HSBC have beenmandated as lead managers frthe issue, which is expected t

be issued later this year r early2012.

Last time the Sukuk industrysaw this level f activity it was

subject t a series f bmbshellsin the frm f widely mis-cnstrued remarks frm TaqiUsmani n the Shariah cmpli-ance f certain types f Sukuk,the credit crisis in general andThe Investment Dars stush

with Blm Bank ver whethera transactin shuld have beenentered int in the rst place nthe grunds f Shariah permis-sibility. Anther such bmbshellculd easily derail the speedingSukuk train setting the clck

back t 2007 nce again.

Sukuk Salad Days

A RECENT Asia Pacic HRTrends reprt released by

prfessinal services cmpanyTwers Watsn reveals thatShariah advisry jbs are themst difcult t recruit andretain within the MalaysianIslamic banking and nancesectr.

TWs Malaysia glbal dataservices manager, SambhavRakyan [right] tld The Islam-ic Globe: We hear frm urclients that it is always hardt get experienced and skilledtalent with IF knwledge.

Issue 32 thispaper reprted n thedisprprtinate availabilityf IF jbs t the grwingnumber f IF graduates andthe fllwing week questined

AAoIFIs deputy secretarygeneral Khairul Nizam wh

claimed there was a shrtage

f qualied peple cmingint the industry.T these cncerns Rakyan

feels there is greater de-mand fr mre experiencedprfessinals, adding abutthe Malaysian sectr: Thereare plenty f jbs fr new

graduates within the IF sec-tr. Peple are shifting mre

rapidly frm ne cmpany tanther due t demand frtalent in this sectr.

The study f 74 nancialinstitutins included 12 lcaland six freign IFIs perat-ing in Malaysia. It threw upan interesting highlight withregards t IF sectr salariesand cmpensatin wherecnventinal FIs are ptingfr mre xed pay and lessshrt-term incentives t dis-curage bankers frm taking

unnecessary risks fr shrt-term gains.Lcal Malaysian IFIs are

paying higher base salariescmpared t their freigncunterparts, althugh ac-crding t Rakyan, the gap isdiminishing.

Recruits are hardto find and retain

By Paul McNamara

Taqa in 3.5bnRinggit issueTAQA, Abu Dhabis Natinal EnergyCmpany is set t issue RM3.4bn($1.1bn) in Sukuk as the utility cm-pany seeks t diversify its nancing

base, accrding t news agencies.This will be the rst Ringgit issue

by the UAE cmpany and fllwswhat will becme a well-wrn patht the east after Natinal Bank f

Abu Dhabi sld tw bnds f RM1bn($200m) last year.

A lt mre MENA mney will bending its way int Malaysia and itsenvirns in the aftermath f the ArabSpring, and it is expected that manyGCC cmpanies will nw lk t di-

versify their funding away frm dllarand dllar-linked currencies as glbalecnmic uncertainty and questinsver the strength f the US ecnmy

cntinues.Tamweel f Dubai is als expected

t raise mney frm the Malaysianmarkets. Taqa has AED72.3bn($19.7bn) in utstanding debt,including an AED5.51bn ($1.5bn)lan maturing next year, accrding tBlmberg.

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10/12

0 october 5, 2011 The Islamic Globe

Dr Dry!once again I nd myself acntrted heap f cnictingemtins. on the ne hand I am ThrilledT Bits that I am leaving fr America inthe mrning where the bank is gingt try t d an Islamic Private EquityTransactin. But n the ther hand I amDeeply Peeved because my Brand New Green

Watch which I had been s prud f hasstpped wrking! Can yu believe it? I thughtthese watches were suppsed t be rbust andalmst unbreakable. I had read that James Bnduses them as knuckle-dusters! But it seems I

was wrng.What happened was this: I had decided that

I wuld make a Fruity orange Jelly and bringit int the fce t share with the peple wh

were nt lucky enugh t have gne n the

Sukuk Radshw. Anyway, my mind was nt nthe task at hand when I was making the Fruityorange Jelly and smehw my watch slipped ffmy wrist and int the Jelly Bwl.

It stayed there vernight while I WaitedFr The Jelly T Set and when I fund it inthe mrning I laughed my light musical laugh

because I knw hw sturdy and manly thesewatches are. Imagine my hrrr t nd smef the rangey tasty delight UNDER the glassf the watch and that the watch was n lngerticking! I think even Mary Pppins culd have

been frgiven a murmur f disquiet at such ashcking turn f events.

Fr the rest f the day I was in the Slugh ofDespnd. My mther suggested that I send thewatch back t the manufacturers and cmplain.S I sent it ff with a Terse Nte in the frm fa Stiff Letter. I used the wrd liaise a ttal ffur times in the letter t let them knw thatThey Were Nt Dealing With A Fl. I awaitsatisfactin.

That was when my mind turned t my up-cming visit t America! I knw that I will ntsleep tnight with excitement and I have beenreading up n everything t d with America. Ithught that there was a cruel irny in ne f thefacts abut America that I discvered: insteadf saying Jam Americans say Jelly! I dnt

nrmally believe in cnspiracy theries but thiswas just a little t clse t hme t be cmfrt-able. They als have a blind spt when it cmest Aluminium (which they call Aluminum) andTffee (which they call Taffy). And they tell eachther that things are Cpasetic. Its like a whlenew language.

The Private Equity Trip t America willbe the same MEIB Psse that went n theRadshw: just the hard-bitten rad warrirsf Chairman, CEo, General Manager and me.I like t think f us as The Three Musketeersexcept f curse there are fur f us and wednt all have mustaches. Well, we d actually

althugh General Managers is Quite Small andQuite Grey and I think we are meant t pretend

we cannt see it.

Follow Aboubakar on Facebook where he shares other add-

itional insights into his unique life and style (http://www.

facebook.com/pages/Aboubakar/120536218039526).

tanzania b p-

up bc x

ilc c p

afrc w bvy f

w rl prduc ld c u

x fw .The Islamic Globe has learned thatKenya Cmmercial Bank, which alsrecently started peratins in Uganda[see Issue 15], is abut t launch a retail

banking prduct in Tanzania. WithFirst Natinal Bank f Suth Africa andNatinal Bank f Cmmerce f Kenyaals setting up Shariah cmpliantperatins in Tanzania, the chice fprducts fr the retail Islamic nancecustmer is set t bm.

KCB will be ffering a simpleinterest-free current accunt which,accrding t the banks MD, Jram

Kiarie, will: operate as a checkingaccunt fr bth persnal and businesscustmers.

The accunt will ffer all the featuresf regular cnventinal accunts

including checkbk, ATM access and aprepaid Visa card.

Sme 50% f the ppulatin inTanzania is Muslim, and as such it isa ripe market fr the regins Islamic

banking giants.Clser ecnmic cperatinbetween the states f the East AfricaCmmunity (Burundi, Kenya, Rwanda,Tanzania, and Uganda) has allwed

banking grups that perate in theregins largest ecnmy, Kenya, texpand acrss the brders and quicklyset up peratins in the cuntry.

Hwever, up until nw Tanzaniasbanking regulatins have nt madeprvisin fr Islamic banking. Regula-try change has been driven by the

banking industry in cnsultatin withthe Natinal Muslim Cuncil f Tan-

zania, f which the latter has stipulatedthe establishment f an independent

Amana Banking Advisry Bard tversee prducts and the appintmentf Shariah cmpliance fcers.

KCB rolls out

retail accountin Tanzania

FK

MALAYSIAS AmIslamic Bank hasissued the rst tranche f its prpsedRM2bn ($627m) subrdinated Sukukprgram. The ntes will be issued un-der a Musharakah cntract.

Each tranche will have a tenr fbetween ve and 15 years frm date fissue, with a tp-end yield f 4.4%.

The rst tranche f RM600m($188m) will be used fr the bankswrking capital, including the renanc-ing f its existing RM400m ($125m)subrdinated Sukuk issued in 2006.

The Sukuk prgram has been givena lng-term rating f A1 by Malaysian-

based RAM Rating Services.

AMIslamic issues firsttranche of RM2bn Sukuk

Hot spot: Tanzania is enjoying

a boom in new products


11/12

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12/12

Nairobi-sd

Tkful insunc

f afc hs un-

dwttn usnss

wth slghtly v $1m n th

lst fu mnths snc t sttd

ptns n Kny.

Fo Kenya, $1m is high whencompaed to the pemia of con-

ventional insuance companies,and indicates that thee is ahealthy appetite fo Takaful inKenya. Undewiting comme-cial and pivate moto vehicleinsuance has emeged as ounumbe one business but gene-ally all ou geneal insuance

business categoies ae doingwell, TIAs CEO Hassan Bashi[pictured] told The IslamicGlobe.

TIA is the only fully-edgedTakaful insue in east Afica,

with fou banches in Kenya.Bashi said that the company

was engaged in talks with

the insuance egulatos inTanzania and in Uganda toenable it set up banches inthese two counties, as wellas helping the egulatos withthe efom of thei nationalinsuance laws to placeTakaful on a level footing with

conventional insuance.TIAs stong gowth since

launch can also be explained

by the fact it is the only gamein town, with no othe fully-edged Takaful insuance ms

yet opeating in Kenya.Hassan explained that TIAs

enty to othe East Afica Com-munity states whee thee islittle else in the way of Takaful

cove will hopefully see TIAentenched as the egions domi-nant Takaful povide.

Takaful NewsTIAs figures proves

Takaful appetite

QATAr Fist Investment Bank,a Doha-based Islamic invest-ment m has been awaded anallocation of 10% of the UAEsNational Takaful CompanysIPO, accoding to news agencies.

The Abu Dhabi-based Taka-ful company, also known asWatania, closed its IPO in May

[see Issue 12] selling 55% of itsshae capital. Of this 13.33%

was eseved fo UAE-onlyinvestos, with 45% emain-ing in the hands of Wataniasfounding patnes, Abu Dhabi

National Islamic Finance (patof National Bank of Abu Dhabi),Abu Dhabi National Insuance

Company, Abu Dhabi NationalEnegy Company and AldaPopeties.

It was suggested that QataFist acquied 10.3% of thecompany though the IPO and

a seat on the boad. Wataniawill list on the Abu Dhabibouse ADX.

Great

EasternGoals

Qatar First in Abu Dhabi alliance

GreaT estn Tkful f

Mlys hs st ts sghts n

chvng gt thngs fm ts

nwst pduct, -Gt aml.

i-Gt aml s Gt est-

ns st Tkful tm pln

nd th cmpny s hpng f

rM25m ($7.8m) t rM30m

($9.4m) n ttl wghtd

cntutns y th nd f

nxt y.

Mhmd Slhuddn

ahmd, Ceo f Gt est-

n Tkful sd th cmpny

hpd t sgn twn 30,000

nd 50,000 plcyhlds t

-Gt aml y th nd f nxt

y.

ahmd tld th md:

-Gt aml ls pvds

n pptunty f idh

Qn wh th cmpny wll

pfm th idh n hlff th plcyhlds ft 10

ys f cntutnsUpn

chng mtuty t th g f

70 ys, th cmpny wll tp

up rM2,000 ($623) t th pl-

cyhlds ccunts f pfm-

ng Hjj Umh s nt yt

utlzd.

H ls ndctd tht Gt

estn plnnd t lunch

m pducts ths y wth

n ductn fcus: W hv

tw pducts n th ppln

f lunch nxt y. Thy xpctd t tnd-sttng n

th Tkful ndusty.

SB
http://www.mcca.com.au/

IG Issue34 Mashreq Tcm38-60564

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