Islamic Finance News

Supplements

The December IFN Supplement will focus on the Middle East Islamic markets and issuer and investor activity across all jurisdictions in the region. All eyes are increasingly focused on the Middle East markets, with jurisdictions such as the UAE, Qatar, Saudi Arabia and Bahrain ramping up their Islamic finance activity to cater to growing market demand. Investors are also becoming increasingly comfortable with doing business in the region with the opening up of the markets, steady GDP growth and import-export activity, high liquidity levels, the region’s growing relations with Asia and its status as an emerging market with extensive untapped potential. Being a natural hub for Islamic finance due to its population demographic, and also a hotspot for international talent, the Middle East markets is becoming increasingly dynamic in terms of issuer and investor activity, and have come leaps and bounds from the 2008 defaults; an acid test which it successfully emerged from. With increased transparency, tighter regulations, the provision of sound infrastructure and an overall healthier business outlook, the Middle East Islamic finance markets are set to thrive. In this issue of Islamic Finance news Supplements, we take an in-depth look at the Middle East and how current shifts in its political and socioeconomic landscape has affected the markets as well as the opportunities that have emerged from the rubble. We gain expert opinion on the best investment moves in the Middle East, market demand and product development via roundtables, interviews and features. The cover story will focus on the dynamic structure of dual-tranche bonds and its increasing demand in the region, as well as its relevance to today’s market environment. Other in-house authored features will cover cross-border and trade finance, liquidity management instruments catered to the GCC markets, investors’ preferred asset classes as well as the Arab Spring and how governments intend to utilize Islamic finance instruments such as Sukuk to rebuild and finance much-needed infrastructure development. . View interactive book View PDF Edition

CONTENTS COVER STORY The Rise of Dual Tranche Bonds The Rise of Dual Tranche Bonds Middle East corporates and issuers are becoming more inclined to issue Islamic tranches within their conventional fi nancing facilities in a bid to attract a wider investor base and to tap the more liquid Islamic banks to meet their financing requirements FEATURES Cross-Border Trade on the Rise Trade volumes between the Gulf and Asia have tripled since 2004, and much of the incremental demand for Gulf exports going forward is expected to come from Asia. The Middle East is also increasingly looking to the emerging markets of Africa for new investment avenues and its abundant untapped resources. Unprecedented Opportunities Escalating tensions and political uncertainty in the Middle East and North Africa have caused businesses to be put on hold, and investors are jittery about the stability of this emerging market. Which countries in the GCC region are set to benefit from the repercussions of the Arab Spring as investors play musical chairs? Too Hot to Handle? Islamic banks across the globe, particularly in the GCC, are sitting on a whole lot of cash. However, aside from Saudi Arabia, many banks in the GCC countries such as Kuwait are forced to export their cash as a means to create equilibrium on their balance sheets. Takaful in the Middle East: Gaining Traction In the wake of the Arab spring, the Middle East appears to have found a rallying call of solidarity between members of the Arab league. Down but Definitely Not Out Unlike its arid surroundings, the Middle East has been anything but dry on liquidity. CHAPTERS Case Study: First Gulf Bank Sukuk The First Gulf Bank (FGB) recently issued a five-year US$650 million Sukuk, marking the first Shariah compliant issuance by a GCC-incorporated conventional bank. The GCC Takaful Market: Evolving Fast Despite the slowdown, and a tough year for the regional financial industry that was affected mainly by the socio-political uncertainties, the Takaful market remains promising and is expected to be a US$12 billion global industry by the end of 2011: an increase of 31% from the figures achieved in 2010 as estimated by the World Takaful Report 2011 by Ernst & Young Bridging the Digital Divide The rapid evolution and growth of the Islamic banking and financing industry has predicated the need for Islamic financial institutions to offer increasingly sophisticated products and services in order to meet the current and future expectations of their customers