Thomson Reuters launches the world's first Islamic Interbank Benchmark Rate (IIBR)

Thomson Reuters launches the world's first Islamic Interbank Benchmark Rate (IIBR)

This is a welcome development for the Islamic Finance industry:


'Thomson Reuters today launched the world's first Islamic finance benchmark rate, designed to provide an objective and dedicated indicator for the average expected return on Shariah-compliant short-term interbank funding: The Islamic Interbank Benchmark Rate (IIBR).'

Further details in the official press release.

Thomson Reuters launches the world's first Islamic Interbank Benchmark Rate (IIBR)

Financial Guarantee as an Innovation Tool in Islamic Project Finance

Financial Guarantee as an Innovation Tool in Islamic Project Finance
By M. Kabir Hassan & Issouf Soumaré

Abstract: "This paper proposes a model to study the arrangement of Islamic project finance with the participation of the government as a provider of loan guarantees. The owner-shareholders (musharaka certificate holders) initiate a project and raise funds by issuing Islamic profit-loss sharing mudaraba certificates. The government intervenes in providing financial guarantees in order to enhance the creditworthiness and increase the mudaraba capital capacity of the project. Our work raises several policy implications related to the structuring of Islamic project finance and the participation of both government and multilateral public agencies such as the Islamic Development Bank. It provides a unifying framework for the improvement of access to funds for Islamic projects and gives a rationale for government intervention in the arrangement of these projects."

Financial Guarantee as an Innovation Tool in Islamic Project Finance

Islamic Bond Issuance - What Sovereign Debt Managers Need to Know

Islamic Bond Issuance - What Sovereign Debt Managers Need to Know
Prepared by Andreas Jobst, Peter Kunzel, Paul Mills, and Amadou Sy
IMF Policy Discussion Paper
Monetary and Capital Markets Department
July 2008

Abstract: "Recent years have witnessed a surge in the issuance of Islamic capital market securities (sukuk) by corporates and public sector entities amid growing demand for alternative investments. As the sukuk market continues to develop, new challenges and opportunities for sovereign debt managers and capital market development arise. This paper reviews the key developments in the sukuk market and informs the debate about challenges and opportunities going forward."


Alternate link (SSRN)

Islamic Bond Issuance - What Sovereign Debt Managers Need to Know

Financial Guarantee as Innovation Tool in Islamic Project Finance

Financial Guarantee as Innovation Tool in Islamic Project Finance
Issouf Soumaré, Laval University
Kabir M. Hassan, University of New Orleans
February 2006

Abstract: "This paper proposes a model to study the arrangement of Islamic project finance with the participation of the government as provider of loan guarantees. The entrepreneur (musharakah) initiates a project and raises funds by issuing Islamic profit sharing debt instruments (mudarabah). The government intervenes in providing financial guarantees in order to enhance the creditworthiness and increase the debt capacity of the project. Our work raises several policy implications related to the structuring of Islamic project finance and the participation of both government and multilateral public agencies such as the Islamic Development Bank. It provides a unifying framework for the improvement of access to funds for Islamic projects and gives a rationale for the government intervention in the arrangement of those projects."

Financial Guarantee as Innovation Tool in Islamic Project Finance

Islamic Project Finance in The Kingdom of Saudi Arabia

Islamic Project Finance in The Kingdom of Saudi Arabia
Craig Nethercott and Mohammed Al Sheikh – White & Case llp
Hissam Kamal and Sheikha Al Sudairy – HSBC Saudi Arabia Limited
July 2006

"...there was a common scepticism as to whether the products applied in Qatar, Oman and elsewhere in the Gulf could be used in Saudi Arabia. The full spectrum of Islamic financing products is commonly utilised in Saudi Arabia (mostly in retail banking), but never before had an Islamic financing product been used in a multi-sourced financing."

Islamic Project Finance in The Kingdom of Saudi Arabia

Islamic Finance and Structured Commodity Finance Techniques

Islamic Finance and Structured Commodity Finance Techniques: Where The Twain Can Meet

UNCTAD secretariat
May 2006

"This study discusses Islamic trade and project financing techniques, and draws parallels with conventional finance. It is hoped that the discussion will inspire conventional bankers to incorporate Islamic financing structures into their credit packages, and Islamic bankers to adopt some of the innovations of structured finance to expand their lending and investment possibilities."

Islamic Finance and Structured Commodity Finance Techniques

Case Study: Islamic Banking in Bangladesh

Islamic Banking in Bangladesh: Achievements & Challenges
Abdul Awwal Sarker
IBTRA
2005

Abstract: "For a continued expansion of the Islamic Banking system, however, a number of issues that pose serious problems for Islamic banks will need to be carefully addressed. This paper discusses and makes recommendations on the more pertinent of these issues, viz., the development of an Inter-Bank Islamic Money Market, activation of Shariah Supervisory Boards, enactment of a full-fledged Islamic Banking Act, development of New Financial Products in line with the Islamic Shariah, and extension of investment in line with PLS framework, especially by constituting consortium or syndication by the Islamic banks. The paper suggests that micro, small, and medium enterprises (MSMEs) should get priority in the investment decisions of the Islamic banks."

Case Study: Islamic Banking in Bangladesh

Profitability Determinants of Islamic Banks: A Cointegration Approach

Profitability Determinants of Islamic Banks: A Cointegration Approach
by Professor Sudin Haron and Dr Wan Nursofiza Wan Azmi
KLBS - Working Paper Series 004
December 2004

Profitability Determinants of Islamic Banks: A Cointegration Approach

Towards Developing a Successful Islamic Financial System

Towards Developing a Successful Islamic Financial System

by Professor Sudin Haron
KLBS - Working Paper Series 003
2004

Towards Developing a Successful Islamic Financial System

Case Study: MIGA and Islamic Finance

Doraleh Container Terminal Case Study
World Bank Group

Multilateral Investment Guarantee Agency

Djibouti, April 2008

Abstract: "Increased liquidity in Islamic financial markets, spurred by oil revenues in the Gulf region, is creating a growing demand for deals structured using Islamic finance. In order to satisfy this demand, traditional business tools need to be adapted to meet the relatively unique and complex needs of Islamic finance. In 2007, Multilateral Investment Guarantee Agency (MIGA) was tapped to provide political risk insurance for a critical project in Djibouti that was being funded through an Islamic financing structure. The main challenge faced by the agency was that the project's Islamic financing structure had payment obligations spread out across numerous agreements, while MIGA's guarantee coverage for third party lenders normally considers such obligations under a single loan agreement. MIGA structured its guarantee in a way that addressed the key risks that concerned the project financiers, while meeting the strict requirements governing the Islamic structure. This resulted in the agency's first-ever guarantee coverage of an investment supported by an Islamic financing structure. The Doraleh Container Terminal project involves the development, design, construction, management, operation, and maintenance of a new container port terminal in the city of Doraleh, Republic of Djibouti."

Case Study: MIGA and Islamic Finance

Determinants of Islamic Bank Profitability

Determinants of Islamic Bank Profitability

by Professor Sudin Haron

KLBS - Working Paper Series 002

March 2004

Determinants of Islamic Bank Profitability