Petroleum Economist is reporting that Sharia-compliant financing structures are becoming increasingly prominent in oil and gas transactions.

According to Petroleum Economist, after a lengthy gestation period and a few false starts, Islamic financial instruments are set to play a growing role in energy finance –  in the Muslim world and beyond. Sharia-compliant instruments, traditionally confined to the retail banking market, have broken out of that niche over the past five years, migrating toward infrastructure sectors including energy.

Islamic funding in Middle Eastern project-finance deals are now commonplace. Petroleum Economist believes that the use of Islamic project financing in the energy sector took a big step forwards with the $3.45 billion Dolphin Energy project financing in September 2005. This project involved the production and processing of gas from Qatar for supply to utility customers in the UAE and Oman at the end of 2006.

For reference to the original Petroleum Economist story, please click here: http://www.petroleum-economist.com/default.asp?page=14&PubID=46&ISS=25616&SID=725889

The Global Head of Islamic finance at Thomson Reuters, Rushdi Siddiqui, predicts that Islamic Finance is set to be a $2 trillion industry in the next five years, according to AMEInfo.com.

Speaking at a panel discussion at the Middle East, North Africa and South Asia Forum titled “The Challenges Ahead for Islamic finance,” Siddiqui said, “It took the Islamic finance industry 40 years to become a $1 trillion industry. It will take another two to five years to become a $2 trillion industry.”

According to AMEinfo.com, there are many challenges that need to be overcome for the industry to realize its potential. Panelists said the lack of standardization in the industry, the lack of consensus among Shari’ah scholars, the poor “connectivity” between Islamic finance institutions across the world, and the global shortage of experienced Islamic finance professionals are some of the challenges facing the industry.

Hosted by the Dubai International Finance Center, the MENASA Forum is focused on discussing the critical opportunities and challenges confronting the Middle East, North Africa and South Asia region over the next decade. Under the theme of ‘finance for the Next Decade of Growth,’ the MENASA Forum featured over 250 members of the regional and international banking and financial services industry, regulators and senior business executives.

For the original AMEinfo.com article, please click here: http://www.ameinfo.com/233491.html

Ernst & Young was a Gold Sponsor at the General Arab Insurance Conference held May 17-19, 2010. The conference was hosted in Jordan and organized by the Jordan Insurance Federation in cooperation with the General Arab Insurance Federation. The conference was attended by over 1,500 participants representing large local, regional and international organizations operating in the insurance and reinsurance sectors, in addition to a number of prominent investors, brokerage, Third Party Administrators (TPA), loss adjustors and lawyers.

In an interview with Trade Arabia, Ernst & Young shed light on the purposes for its involvement in the conference. “This conference is one of the largest taking place in the Middle East that brings together notable economists and insurance experts,” said Bishr Baker, managing partner at Ernst & Young, to Trade Arabia. “The financial crisis has undoubtedly impacted the sector, giving new meaning to the concept of liability, and so it is time to put forward strategies for companies to follow in order to maintain stability in the market.”

The third edition of Ernst & Young’s ‘World Takaful Report 2010: Managing performance in a recovery,’ unveiled at the 5th Annual World Takaful Conference of 2010, confirmed that the global Islamic Insurance (Takaful) industry is on course to surpass $8.8 billion in contributions in 2010. Contributions grew by 29 percent in 2008 to reach $5.3 billion.

For the original Trade Arabia story, please click here: https://www.tradearabia.com/news/BANK_180219.html

Arabian Business is reporting that a new study conducted by Bank Sarasin earlier this week has concluded that Islamic banks are largely failing to cater to their clients’ wealth management and estate planning needs – pushing them to rely on traditional asset managers.

The Islamic Wealth Management report also commented that Islamic succession planning is in need of an overhaul, as it currently lacks mechanisms to ensure wealth preservation over generations.

For more information about Shariah-compliant estate planning, Islamic inheritance rules, or other related information, please contact info@islamic-finance-blog.com.

For the original Arabian Business story (reprinted from Reuters), please click here: http://www.arabianbusiness.com/585120-islamic-finance-short-on-wealth-management

The Minnesota Daily has reported that the city of Minneapolis is providing Islamic financing and Shariah-compliant loans and lending solutions to Minneapolis businesses. According to the paper, the city of Minneapolis has partnered with the African Development Center to loan funds to Muslim business owners in the local Minneapolis community in a manner that is Shariah-compliant and avoids variable rate interest financing.

Provisions in the loan program, termed the “Alternative Finance Program,” require Minneapolis Muslim-owned businesses to pay a fixed rate of return, similar to an altered version of the “Two-Percent” loans offered by the City’s Department of Community Planning and Economic Development. The Minnesota Daily reports that 38 such loans have been provided so far. The loans have gone to restaurants, retailers, computer, clothing, and bookstores.

Minneapolis Community Planning and Economic Development Business Finance Director Bob Lind states that he believes Minneapolis is the first U.S. city to adopt Shariah-friendly loan programs. He sees the city’s version as becoming a model for others in the future.

For the original Minnesota Daily story, please click here: http://www.mndaily.com/2010/03/24/loan-caters-minneapolis-muslim-business-owners

For information on Islamic financing or Shariah-compliant transactional products, please contact Ice Miller’s Islamic Finance, Business, and Litigation attorneys at info@islamic-finance-blog.com.

U.S. Connecticut-based Shariah Capital predicts that more Shariah-compliant hedge funds will likely be launched, specializing in healthcare, telecommunications, and technology stocks.

According to Reuters, thus far, Islamic hedge funds have had trouble getting off the ground, due to the prohibitions against speculative financial techniques and transactions that are commonplace in hedge funds, derivatives, and other sophisticated financial investment tools. But now, the $1 trillion Islamic finance industry is broadening its reach into areas that were strictly off limits. In recent years, there have been increasing developments in, for example, issuance of credit cards that are Islamic-compliant, as well as hedge funds and derivatives trading.

Earlier this month, IIFM, an Islamic finance industry body, with the backing of a derivatives association and banks such as Credit Agricole (CAGR.PA) and Standard Chartered (STAN.L), launched a template over-the-counter Islamic derivative contract. The move was intended to address concerns by industry practitioners and scholars about the extent to which derivatives trading comports with traditional Shariah principles.

There is no doubt that there will be more attention paid to Shariah-compliant financial products as the industry continues to grow. For more information on the challenges posed to financial instruments and common diversification techniques or products by Islamic principles, please contact the attorneys at Ice Miller at info@islamic-finance-blog.com.

For the original Reuters story, please click here: http://www.reuters.com/article/idUKSGE61308Z20100311

HSBC Amanah has been named Best International Islamic Bank by Euromoney magazine, in its Islamic Finance Awards 2010. AMEinfo.com reports that the Euromoney awards are widely considered to be the most high profile accolades in the Islamic Finance calendar and annually recognize outstanding performance, quality, service, and innovation in the sector.

In addition to being awarded the title of Best International Islamic Bank, Euromoney also named HSBC Amanah Best Sukuk House for the leading role it continues to play in Islamic debt capital markets.

According to AMEinfo.com, During 2009 HSBC Amanah grew its operations in Saudi Arabia, through SABB, UAE, and Malaysia, while expanding in the key growth territories of Indonesia, Qatar and Bahrain. The business launched HSBC Amanah Premier, the world’s first international Islamic premium banking service and led activity in the Islamic debt capital markets, structuring and lead managing many of the landmark transactions in 2009.

For the full story, click here: http://www.ameinfo.com/223934.html

Business 24|7 reports that Connecticut-based Shariah Capital and Dubai Multi- Commodities Centre (DMCC) plan to boost assets under management in their specialized commodity funds to the “multibillion” dollar level in three years from almost $260 million now, senior officials said.

“Our plan is to make this a multibillion project within three years. We’re now ready to raise funds,” Eric Meyer, Chairman and Chief Executive of Shariah Capital, told Zawya Dow Jones in an interview.

DMCC, part of Dubai World, in a joint venture with Shariah Capital known as Dubai Shariah Asset Management (DSAM), launched a basket of four commodity-focused funds in 2008 and seeded the funds with $50 million each. DSAM develops and manages Shariah-compliant investment funds focused on commodities.

The DSAM Kauthar Commodity Fund, an equally-weighted fund of funds comprised of the four single-strategy commodity-focused funds, had total assets under management of $259 million as of January 31, 2010, DMCC’s Chairman Ahmed bin Sulayem said.

The DSAM Kauthar Commodity fund of funds was up 41 percent in 2009, with all single-strategy funds also in positive territory in 2009.

The Sharia Capital-DMCC joint venture is now in the process of partnering with banks and insurance companies in the Middle East, Europe and Malaysia to sell the funds, Meyer said, adding that the target is to secure 25 percent of the assets from Saudi Arabia.

Full story from Business 24|7 here: http://www.opalesque.com/IslamicFinance_Briefing/?p=6146

In the next few months, Saudi Arabia will move forward in pushing the frontiers of Shariah complaint lending/financing practices by issuing its first mortgage law. Bloomberg reports that the legislation will boost the real-estate industry and allow banks to diversify their balance sheets.

Apparently, Saudi Arabia’s property market is suffering from a shortage of housing units, shielding the kingdom from corrections in the real estate markets of other Gulf Arab states. Real estate prices in Dubai plummeted around 50 percent from their peak, according to Deutsche Bank estimates.

The Sharia-compliant legislation which has been discussed for the past two years will consist of five parts. It will define the terms of mortgages, how they are designed, how they are granted, how companies are licensed and how procedures will be enforced.

The legislation is on the way to the council of ministers before going to the Shura Council, the country’s consultative assembly, for final approval.

Full story, here: http://www.bloomberg.com/apps/news?pid=20601104&sid=afy6Vy3FViNg