RUSSIA - Changes to Law Needed to Facilitate Sukuk Use

JAKARTA — Russian borrowers are pitching plans to sell the nation's first Islamic bonds even as regulators lag behind in customizing laws for the industry.

Executives from Gazprombank, the lending arm of gas export monopoly Gazprom, are in Southeast Asia to seek support for issuance by as many as five companies, Alexander Kazakov, director of structured and syndicated finance at the bank, said in Jakarta. Tatarstan, a Muslim-majority Russian republic, will announce a dollar-denominated sale soon, according to Kuala Lumpur-based adviser AmanahRaya Investment Bank, which is working on the proposal. (source)

RUSSIA - For Islamic finance, Tartarstan to be Russia's test case

Officials meeting in the shadow of the snowy towers of Kazan's 16th century white Kremlin are in an unlikely site for hatching groundbreaking financial plans. But Kazan in Russia's Tartarstan region aims to be the first place in Russia to launch an Islamic bond, with a planned $100m-200m sukuk issue planned for July this year that will be a test case for the appetite for Islamic financial products in Russia.

Countries ranging from France and the UK, Thailand to Brazil are all exploring how to use Islamic financial investment to draw gulf petrodollars into their economies. The Islamic finance industry has boomed in recent years, growing at a rate of over 14% per annum from around $150bn since the 1990s to a total of $14.1 trillion in 2009, according to Jamelah Jamaluddin, CEO of Kuwait Finance House in Malaysia. The growth is to "serve over a billion people who have previously been underserviced," by the financial industry, she notes. (full story)