EUROPE - ARTICLE - Islamic Banking and Finance on the European Market

(by ISFIN) Islamic Finance, developed during the 70's in the Muslim countries, is experiencing an increasing popularity far outside the Muslim World's frontiers. In a world where the dominance of the capitalist economy is obvious, the development of a system where the main principle is the exclusion the interest rate comes close to being an exploit. At first, Islamic finance has been implemented in the Western World mainly to benefit from the advantages offered by European financial centers such as the Luxembourg and Switzerland. From this first tendency, only the corporate and private banking clients have taken advantage of. It is only recently that retail services started to be offered on the Western territory, conscious of the increasing economic power of the different European Muslim communities. (full article and source)

FRANCE / KSA - SATORP's debut sukuk oversubscribed 3.5 times

Saudi Aramco Total Refining and Petrochemical Company (SATORP), a joint venture between Saudi Aramco and Total S.A. of France, issued its debut sukuk Sunday and there are signs that several other potential Saudi issuers are lining up to go to the market preferring to raise funds in this way despite the continuing turmoil in the global financial market and economy.

According to the latest information available Sunday, the SATORP bond issue was 3.5 times oversubscribed. (source)

LUXEMBOURG - Luxembourg, a significant hub for Islamic finance

Although the Grand Duchy of Luxembourg is a very small country in terms of area and population (2,586 km2 and 502,000 inhabitants), it is one of the most important financial centers all over Europe. Nowadays, Luxembourg is considered to be the first European financial centre and globally the second after the United States of America in terms of fund industry. Furthermore, Luxembourg is recognized as one of the leading Islamic financial centers through its history in the field of Islamic finance and its continuous efforts to develop this sector.  (source)

UK - Sesame partner with Islamic Bank of Britain

Sesame partner with Islamic Bank of Britain for Islamic mortgage alternative.

Sesame Network members will have access to the full range of IBB’s Sharia compliant mortgage alternative, the Home Purchase Plan.  As part of the tie-up, intermediaries will be able to submit fully packaged applications or referrals to IBB. (full story)

AWARDS - IFN - Poll 2010 - Deal of the Year

European Deal of the Year

International Innovative Technologies US$9.5million Sukuk Musharakah

The financial crises took its toll on European deals in 2010. A revived Gatehouse Bank engaged in several real estate acquisitions and The Bank of London and the Middle East showed strength.  Curiously, the smallest deal is awarded the best deal. Millenium Private Equity structured a GBP6.1 million Sukuk on behalf of International Innovative Technologies. The Musharakah transaction is notable for creating a model that Millenium and other private equity firms may apply to UK and international acquisitions as they develop capital structures which allow efficiency and exits. Although the deal is small, the significance should be seen in its future application.

Turkey Deal of the Year

Kuveyt Turk Participation Bank US$100 million

Albaraka Turk Katilim Bankasi came to the market with a syndicated facility drawn in US dollars and Euros and Asya Katilim Bankasi successfully syndicated US$225 million. Indeed, the Turkish participation banks were very active in 2010. Kuveyt Turk Participation Bank’s Sukuk deal tops the two larger deals as it sets the framework for future issuances both from Turkey and the participation banking sector.

Sukuk Deal of the Year

Kuveyt Turk Katilim Bankasi winner

There is no denial that the Government of Ras Al Khaimah, 1Malaysia, the two Qatar Islamic Bank linked deals, the Cagamas deals, Islamic Development Bank, and Danga Capital (Khazanah) were among the best Sukuk deals in a good year.  But, the Kuveyt Turk Katilim Benkasi deal (See Deal of the Year) stands out clearly as it opens a new market for the global investor, and creates a model for future issuances from Turkey.

Full results are hereunder :

UK - Milling machine made with Sharia funding

A brand new, UK-built, ultra-fine milling technology launched in Gateshead on October 21 was financed with a sukuk financial instrument – a type of Islamic bond – which is the first of its kind in the UK.

North east company International Innovative Technologies (IIT) says it is the first in the UK to use the facility which is similar to a convertible bond and respects Islamic Sharia law and its investment principles, which prohibits the charging or paying of interest.