Interpreting Middle East Economic News and Analyzing Market Trends

Category: Islamic Finance

Qatar Islamic Bank looks to acquire stake in Turkey’s Bank Asya

Bank Asya

Qatar Islamic Bank (QIB), Qatar’s largest Islamic bank, is in discussions to buy a stake in Bank Asya, Turkey’s largest participation bank (a.k.a. Islamic bank).  This is the second Qatari bank to jump in to Turkey in the past year.  Last March, Commercial Bank of Qatar (CBQ) acquired a 70.8% stake in Alternatifbank AS.  QIB’s timing, however, might prove to be better than CBQ’s.

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Bank of England is looking to enhance its appeal to Islamic banks

 

Bank of England

Photo source: The Economist

The Bank of England is planning on stepping up its liquidity offerings for Islamic banks amidst growing competition from Kuala Lumpur and Dubai, both of which are commited to becoming global Islamic banking centers.  London is still the defacto global Islamic banking center due to the sheer volume of Islamic banking transactions that flow through it.  However, new contenders are starting to slice away at London’s pie.

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Ambitious Gulf investors to launch Islamic bank in Luxembourg with goal of serving wider European market

 

Islamic Bank in Lux

Gulf investors are again attempting to launch an Islamic bank in mainland Europe, this time in Luxembourg.  There have been previous attempts at launching Islamic banks in France and Germany, but they were never launched siting an unaccommodating banking regulator as the reason.  Other Islamic banks were launched in Switzerland over the years, but their objectives were very narrow in scope.  The UK, on the other hand, has been the most successful in this regard since it was the first Western country to adopt Islamic banking regulation.  Today, there are four Islamic banks operating in the UK, one retail and three investment banks.  Will an Islamic bank in Luxembourg be successful?

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Junk sukuk – the next trend in Islamic finance… and Kuwait looks to launch derivatives to pump up market

Sukuk Trading

What’s the best way to increase trading volume in stale markets?  Launch exotic new products to entice new investors.  The UAE is looking to launch high-yielding (a.k.a. junk) sukuk as it pushes to become the global hub for Islamic finance and Kuwait is eying the derivatives markets.

  

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Turkey issues $1.25 billion sukuk and sets up Islamic finance center as it finally embraces Islamic finance

Istanbul

 Source: Haberler

The Turkish government decided to jump back into the sukuk market with its latest $1.25 billion sukuk al-ijara.  The country’s first sovereign sukuk was back in September 2012 with a $1.5 billion issue.  The first issue as well as this latest issue have been very successful with high demand from the Middle East.  So much so that Turkey has now decided to embrace Islamic finance by setting up an Islamic finance research center.

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