LUXEMBOURG - Appetite for Islamic Bonds rises despite "Grexit"-fears

news.xinhuanet.com - DUBAI, May 26 (Xinhua) -- While the Euro zone crisis has been weighing on investors' sentiment and on global economic prospects, the issuance of Islamic bonds witnesses a renaissance in East and West likewise.
Global issuances of Islamic Bonds, known as Sukuk, surged 55 percent year-on-year in the first quarter of 2012, reaching 43.5 billion U.S. dollars, according to market research agency Zawya.
Despite the escalation of the Euro zone debt crisis in Greece and Spain, where banks suffered withdrawals worth 800 million Euros (one billion dollars) and one billion Euros (1.25 billion dollars) respectively, weighing on global stock indices in recent weeks, new Sukuk issuances are in the global pipeline.
Last May 22, Fernand Grulms, CEO of Luxembourg for Finance, an initiative which promotes Luxembourg as the second largest hub for investment funds, said in Manama at the World Islamic Funds Conference, that the Grand Duchy plans to issue Islamic bonds. These would be the first Triple-A rated Sukuk issued by a Euro zone sovereign issuer.  (source)

UK - IFR Comment: UK needs to move faster to capture Dim Sum market

www.ifre.com - I do hope London’s efforts to develop into a global hub for offshore renminbi debt issuance (aka Dim Sum bonds) are pushed forward more aggressively than similar efforts to promote London as a global centre for Islamic capital markets.

That may sound a little harsh, given the existence of five fully Sharia-compliant UK-registered banks plus Islamic windows at a host of other banks in the UK. But Islamic finance continues to operate in something of commercial/wholesale backwater in the UK, while on the investment side, it’s kind of been pushed into the ethical investment bucket.  (source)

FRANCE - France’s First Sukuk Hampered by Debt Crisis

islamicfinanceasia.blogspot.com - Jan. 25 (Bloomberg) -- France’s efforts to sell the nation’s first Islamic bonds and attract Shariah investors from the oil-rich Persian Gulf are being hindered by Europe’s debt crisis as borrowing costs rise.

The euro region’s second-biggest economy, which put in place the legal framework to allow banks and other private issuers to sell Islamic bonds in 2009, had its top AAA credit rating cut by Standard & Poor’s on Jan. 13 on concern policy makers are failing to address the effects of the debt crisis. Yields on two-year French government notes have climbed 10 basis points since the one-step reduction, according to data compiled by Bloomberg.  (source)

UK - UK Treasury to rule out sukuk on 'not-value-for-money' basis

The United Kingdom is no where nearer to going to the wholesale sterling market to raise financing through a debut benchmark sovereign sukuk in 2012 than it was in January 2011 when Treasury last confirmed that it would not be “value for money” for the UK taxpayer to do so. (source)

IRELAND - Ireland may be first EU state to sell Islamic bond

www.irishexaminer.com - IRELAND plans to become the first European nation to sell sovereign sukuk — Islam-approved financial certificates — as its equal tax treatment for Islamic-finance products attracts investors.

The Government has agreements with more than 60 countries to avoid double taxation on Islamic transactions, Micheál Smith, the south-east Asia director of IDA Ireland, said.   (source)

UK - CAPITAL MARKETS - UK Experts Eye Islamic Finance Solution

Onislam - CAIRO – A decision by the UK government to put on hold earlier plans for the first Islamic sovereign bond from a western country was criticized as a setback for the initiative that could have provided more security to a shaking economy.

“It would certainly help the UK market if the government decided to go ahead with a benchmark sukuk,” Farmida Bi, partner at Norton Rose, the law firm, told the Financial Times.

“It could galvanize the market and would lead to more interest in Islamic finance in London and [continental] Europe.”  (source)

UK - CAPITAL MARKETS - London: Sukuk required to secure pole position

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HUNGARY - Hungary Debt Chief Rules Out Junk Grade, Eyes Islamic and Ruble Bonds

Sept. 30 (Bloomberg) -- Hungary has a higher chance of the outlook on its credit profile being raised to stable from negative than having its rating cut to junk from the lowest investment grade, the Debt Management Agency said.

Teams from Standard and Poor’s and Moody’s Investors Service will visit the country in October to review its rating, Chief Executive Officer Gyula Pleschinger told a conference in Pecs, southern Hungary, today. S&P rates Hungary BBB- with a negative outlook. Moody’s and Fitch Ratings also rate it a step above junk with negative and stable outlooks, respectively.  (source)

EUROPE - FRANCE - The Time is Now

There are growing calls from the industry for US and European politicians to ditch their skeptical line on Islamic finance and deploy sovereign Sukuk as a way out of a conventional debt-induced nightmare.

After months of deteriorating economic news, confidence in western government debt has collapsed and nervousness prevails in financial markets.

But a groundswell of opinion within the Islamic finance industry believes the moment has arrived for sovereign Sukuk to flourish. And France it seems, with its colonial ties to North and sub-Saharan Africa plus the Levant, has emerged as a front-runner. (source)

UK - FRANCE - LUXEMBOURG - Fragile sukuk market clamors for sovereign issuances

The talk is big, but are potential sukuk originators walking the walk? Depending on who you speak to, the picture is mixed, marked on the other hand by the "irrational" exuberance and ambition of potential issuers, many of whom do not get near to an offering, and on the other hand those who are skeptical and indifferent based on an erroneous belief that sukuk origination is always more expensive than conventional bonds and is further complicated by the Shariah compliance requirement.

The real potential probably lies in between where issuers genuinely see sukuk as an attractive and competitive alternative way of raising funds and therefore a tool to diversify sources of funding. They would however go to the market only when the timing and the pricing is right. Such an issuance in question is the proposed issuance which is expected to be closed this week. (full story - arab news)

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)

U.K. Government Won’t Issue Sovereign Sukuk on Lack of Value

Jan. 12 (Bloomberg) -- The U.K. government decided not to issue sovereign Islamic bonds as they don'€™t €œprovide value for money,€ the debt management office said today. The Exchequer will keep the situation under review, the statement said.

UK - No plans for Sukuk in the immediate future

Sovereign Sukuk Oral Answers to Questions — Treasury House of Commons debates, 21 December 2010, 11:30 am
Roger Williams (Brecon and Radnorshire, Liberal Democrat) What recent discussions he has had on the introduction of a Government-backed sovereign sukuk.
Mark Hoban (Financial Secretary, HM Treasury; Fareham, Conservative) As chairman of the all-party group on Islamic finance and diversity in financial markets, my hon. Friend is well known for his close interest in Islamic finance. The Government believe that sovereign sukuk issuance would not offer value for money at the present time, but the situation remains under review.

FRANCE - Paris EUROPLACE International Financial Forum 2010 / DIFC - Dubai

For further information on the 2010 Dubai/Paris EUROPLACE Financial Forum, please visit the website: www.paris-europlace.net/dubai2010/

Paris EUROPLACE, the association representing the global finance, investment and related business community of Paris, France and Dubai International Financial Centre (DIFC), the UAE-based financial and business centre and gateway between the Middle East, Africa and South Asia region (MEASA) and the world, have jointly organized today their first International Paris EUROPLACE Financial Forum in Dubai. This event is being held following a Memorandum of Understanding signed between DIFC and Paris EUROPLACE in January 2009 to strengthen the links between the two financial market places.

FRANCE - France ready to issue first Islamic bond next year

DUBAI — France will be ready to issue the first Islamic bond issue early next year as the legal framework is in final stage, a former special adviser to financial affairs at the French Treasury said in Dubai on Wednesday.

“We still have to work on some issues for it [Islamic bond or sukuk] but it’s a matter of weeks and then we will be ready in the beginning of 2011,” Thierry Dissaux, who is also Chief Executive of the French Deposits Guarantee Fund, told Khaleej Times on the sidelines of a financial forum in Dubai on Wednesday.

FRANCE - Islamic finance body okays France's sukuk model

A top Islamic finance body has approved France's model to issue local sukuk, or Islamic bonds, which would ease their listing on the Paris financial market, a French official revealed on Wednesday.

The Accounting and Auditing Organisation for Islamic Financial Institutions has approved the model aimed to marry France's tax laws with the Islamic financial instrument, said Thierry Dissaux, the chief executive officer of the French Deposit Guarantee Fund.

FRANCE - First French Islamic bond seen early 2011

DUBAI, (Reuters) - The first Islamic bond issue out of France could happen early next year, the chief executive of the French Deposits Guarantee Fund said on Wednesday.

"At the beginning of 2011 we could see the first sukuk under French law," Thierry Dissaux, also a former special adviser for financial affairs at the French Treasury, said at a conference in Dubai.