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The MBA in Global Islamic Finance at the Universiti Tun Abdul Razak will be available to all students enrolled in the International Business School Alliance, a grouping of universities from Germany, Spain, Russia, the United States, Britain and Malaysia.
In Indonesia, home to the world’s largest Muslim population, the University of Indonesia (UI) began offering a master’s in Islamic banking last year after the country’s central bank asked the school to develop courses to help prepare students for the industry, said Professor Firmanzah, dean of the School of Economics and Business. The school also offers an Islamic banking specialization for MBA students and plans to offer a bachelor’s in Islamic banking and a doctoral program next year. UI is focusing on Islamic banking since the growth of Islamic banking in Indonesia is quite high compared to traditional banks. Meanwhile, La Trobe University in Melbourne started Australia’s first master’s in Islamic banking and Finance this year, and has begun offering Islamic finance as an MBA elective.

Source : The New York Times

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One credit analyst and joint chair of the Islamic finance working group at S& P in Paris stated that Sovereigns, particularly from Asia, are pushing for the revival of the sukuk market. Additional countries, or issuers domiciled in countries new to Islamic finance, to tap the sukuk market in the near future was expected. Likely, it will be within the next 18 months.
The Philippines’ state-owned Al-Amanah Islamic Bank is exploring a sale, according to bank president Armando Samia. Economic growth in developing Asia, including Malaysia and Indonesia, will accelerate to 9.2 percent this year from 6.9 percent in 2009. Middle Eastern economies may expand 4.5 percent compared with 2.4 percent, according to estimates by the International Monetary Fund.
Governments are tappinglocal and international sukuk markets to help set benchmark rates for corporate bond sales. The debt is typically backed by assets or cash flow because Islamic law bars interest payment. Instead, investors earn profits from the assets.

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Indonesia’s Islamic bank assets were Rp 66 trillion ($7.2 billion) as of December, compared with Rp 2,534 trillion for the banking industry as a whole, central bank figures show. In Malaysia, Islamic banking assets totaled about $95 billion. Still, with the world’s biggest Muslim population, Islamic bankers say Indonesia is set for explosive growth. But first, authorities need to lay the right legal and regulatory framework.

Malaysia, the top sukuk market, accounted for about 40 percent of total global issuance last year of $19.1 billion. Incentives include a 20 percent stamp-duty exemption on Islamic securities through 2015. The Finance Ministry and central bank were studying tax incentives that could boost growth of Islamic finance. The study is expected to be finished by the end of the year.

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The announcement provoked concern that a potential default would set back the global financial system’s recovery, according to a report in The Sydney Morning Herald. It also triggered the biggest share market slump in three months in Asia. Online news publication FinanceAsia.com had even graver concerns for the entire sukuk market, with one reporter commenting that it had taken the threat of default to shake investors out of their complacency with regard to those structures. “This will mark the first test of the legal framework underpinning sukuk in general, and it could therefore have implications for Islamic financing globally,” Middle Eastern investment bank EFG Hermes said in a report quoted in the FinanceAsia.com article. But is this really the end? Maimumah said people had simplified the Dubai World incident by saying it was the end of Islamic finance. “The Dubai World debt, the one that they can’t pay, is conventional. The Islamic component is only $5 billion. But the issue here is not the instrument. It’s a credit issue and everyone was overzealous and excited about Dubai’s ambition . and maybe investors failed to look at the credit,” she said. You can’t write off Islamic finance because of this little bad apple . if you aspire to become an international financial services destination, then it is critical that you have an Islamic component. According to a McKinsey & Company report, Islamic assets under management were US$750 billion during 2007/08 and were expected to hit US$1 trillion by 2010. And it seems Australia is not ready to turn its back either, this week hosting a high-level Malaysian Islamic finance delegation to Sydney and Melbourne. “Malaysia has a full-fledged Islamic financial system operating in parallel to the conventional banking system. With over 65 per cent of the population being Muslim, the government is keen to promote Malaysia as a stable Islamic finance hub in Asia,” Austrade trade commissioner Patrick Kearins said.
Maimumah said Australian corporates had shown interest in issuing sukuks and the federal government was working hard to look into providing tax neutrality to facilitate further expansion. “For institutional investors it will give them access to a wider range of product. Due to the recent crisis, some may feel that convention has failed them and they’re now looking at Islamic,” she said.

Source :  Alice Uribe

A Takaful company has the following features:

i) The company is not the one who assumes risks nor the one taking any profit. Rather, it is the participants, the policy holders, who mutually cover each other.

ii) All contributions (premiums) are accumulated into a fund. This fund is invested using Islamic modes of investment and the net profit resulting from these investments is credited back to the fund.

iii) All claims are paid from this fund. The policy holders, as a group, are the owners of any net profit that remains after paying all the claims. They are also collectively responsible if the claims exceed the balance in the fund.

iv) The company acts as a Trustee on behalf of the participants to manage the operations of the Takaful business. The relationship between the company and the policy holders is governed by the terms of mudarabah contract. Therefore, should there be a surplus from the operation, the company (mudarib) will share the surplus with the participants (rabb-al-mal) according to a pre-agreed profit-sharing ratio.