Islamic Finance Bulletin December 2013

Islamic Finance Bulletin

December 2013

lums.lancs.ac.uk/research/centres/golcer

Gulf One Lancaster Centre For Economic Research

Page 2

From the Editor

As we reach year-end and peer into the prospects for 2014, it is clear enough that international markets

are on the cusp of expecting some critical sense of change.

Whether it is the extended buoyancy of global stocks, the nervous retreat of bonds and sukuk, the

middling tendencies of oil and copper, or the receding attraction of gold, all eyes are on the balance

of economic and policy outcomes in the US, and whether China’s pause and reorientation amount to a

significant shift in gears.

While we have documented the major trends and minor fluctuations one way and another in 2013, and

perceived the dominance of these two leading influences, the new year will represent not only a turn of

the calendar but a new phase for investors to get to grips with. At least they are armed with the facts to

address the relevant concerns.

This month we also host a contribution by Thomson Reuters on the Islamic economy, providing another

baseline of understanding as perspectives on Shariah-compliant business opportunity are expanded,

notably by Dubai, into non-financial spheres.

Our in-house piece, meanwhile, addresses the commercial and strategic realities that have attended the

funding programme of Emirates airline, considering both traditional and Islamic bond options to back its

own particular expansion in a dynamic industry.

We wish all readers season’s greetings and a prosperous outlook for the year ahead.

ContentsHIGHLIGHTS (p.3)

RECENT DEVELOPMENTS (p.4)

VIEWPOINT (p.7)

FEATURE (p.10)

STOCK MARKETS (p.14)

COMMODITIES (p.17)

BOND AND CDS MARKETS (p.20)

PERSPECTIVE (p.23)

DIARY (p.24)

Page 3

Islamic Economy: A key event in the Gulf this year

was Dubai’s pitch for leadership of the Islamic

economy, stretching the view of Shariah-compliant

opportunity beyond the financial field. Our viewpoint

article explains the drivers animating segments such

as travel and food, relating especially to population

and consumption trends, emerging markets growth

and trade, and such additional factors as the plans of

conventional multinationals, and communications

technology.

Oil: As cause and effect of the state of the world

economy, oil has had a sideways feel for most of 2013. A

lot of attention may be paid at this point to any signs of

a breakout in prices reflecting interpretations of the net

impact of the Federal Reserve’s tapering plans relative

to underlying business conditions. Crude markets

into December also reflected expectations of both

global supply and demand fundamentals for 2014, and

variations in US inventories.

Gold: By contrast with oil, gold’s direction has been

clear for some time, and sentiment has anticipated

the implications of revised Fed policy. The prospect

of QE’s tapering has been taken to indicate a

diminution of the monetary stimulus that in any case

has failed to ignite an inflationary reaction that might

motivate the precious metal higher. Without running

yield to compensate for lack of capital growth, it has

been the downside that is being thoroughly tested.

Highlights

Recent Developments in the Islamic Finance Industry

Britain will issue ‘one-off’ Islamic bond

Following last month’s initiative by the UK to become

the first hub for Islamic finance in Europe, its plan to

issue sukuk during 2014 is unlikely to be repeated,

according to the head of the country’s debt-issuing

agency. The government is planning to sell a £200m

sukuk as clearly a symbolic and one-off transaction.

No details have yet been given about the timing of

the sale. The government is working closely with the

Treasury as well as with experts in Islamic finance.

Britain first announced plans for a sovereign sukuk

five years ago, but no issuance materialised, since the

government then decided that the required structure

was too expensive.

Source: Reuters, December 5th

A clearer picture emerges with this update on the

prime minister’s announcement, GOLCER suggests.

We still consider this an important step by a Western

country in terms of the industry’s growth, as the

first and largest sovereign sukuk issuance outside

a Muslim country. At the same time, it will bring

potential benefits to London as a financial centre.

Islamic banking to be deepened in Europe

Private investors from some Gulf Arab countries,

including a royal family from the UAE, plan to establish

the first fully-fledged Islamic bank headquartered in

the euro zone. It will be named Eurisbank, with an

initial capital of 60 million euros ($80m). The bank will

offer retail, corporate and private banking services,

with branches in Paris, Brussels, the Netherlands and

Frankfurt. Eurisbank will be owned by an unnamed

country from the Gulf Cooperation Council (GCC)

and other private investors. The founders of the

institution plan to apply for a licence in January 2014,

with expectations to obtain regulatory approvals by

April. By reference, the European Central Bank and

the Malaysia-based Islamic Financial Services Board

worked during 2013 on a joint project study on Islamic

finance in Europe.

Source: ArabianBusiness.com, November 26th

GOLCER perceives this move as being in line with

the UK’s potential to become a hub for Islamic

finance in Europe. It seems that Gulf still would

like to lead the sector, by operating several Islamic

banking branches in the euro zone. The Islamic

finance industry’s emergence in the region has

been very slow, with some attempts by London and

Luxembourg to market themselves as the hosts of

Islamic bonds. This became more evident after the

recent financial crisis, as European governments

have since shown more interest in the sector.

This tendency could be attributed to the claimed

weakness of conventional finance as exposed

during the credit crunch, together with an interest in

attracting oil-rich funding countries.

Dubai’s Expo 2020 win to boost sukuk

Sales of Shariah-compliant debt by Dubai are

expected to surge after the emirate’s successful bid

for the staging of Expo 2020, with the aim to spur

construction projects. Winning the Expo is likely

to increase Dubai’s economic growth rate to 6.4%

over the next three years, as reported by Barclays.

Expectations are that Dubai will spend almost 6

billion euros ($8.1bn) on infrastructure projects

during this period. Raising funds to cover such

outlays would require the right financial structures,

with sukuk tending to be the preferred route of the

government. The emirate will speed up plans for

a 5 billion dirham ($1.36bn) expansion of the city’s

metro network, with a new purpose-built exhibition

centre with themed pavilions to be constructed in

the desert to the south of the city.

Source: Bloomberg, November 27th Page 4

Recent Developments in the Islamic Finance Industry

GOLCER finds that the Expo win will give Dubai more

credibility, but it will have a tough financial target to

meet in coming years, given its need to find cheaper

finance, i.e. lower borrowing costs. Still, however, a

financial burden looms as the potential increase in

spending raises the risk associated with further debt

accumulation by Dubai entities.

Australia to launch Islamic pension

Melbourne plans to launch an Islamic pension fund

in January, collaborating with some of Australia’s

most well-known Muslim organisations. The purpose

is to set up a $1.5trn private pension system. The

fund has received regulatory approval, and has been

developed with the Muslim Community Cooperative

of Australia and the Islamic Council of Victoria (the

governing body for the state’s Muslim community).

Private pension schemes are also making

inroads in majority-Muslim countries including

Pakistan, Turkey and Malaysia, with early experience

suggesting Islamic fund managers can benefit from

such efforts.


This initiative will target a small and scattered

Muslim consumer base that has yet to fully

embrace retirement savings. GOLCER thinks it will

be attractive also to other ethically-inclined fund

investors. However, unlike counterparts in the

ethical sector in Western markets, Islamic pension

funds globally still struggle for lack of scale and

poor management, topics which still need to be

considered by Islamic scholars.

Next stage for MENA region

Expectations for 2014 are that rapidly-growing

Islamic-based finance will drive the next phase of

economic growth across the Middle East and North

Africa (MENA), as discussed in Euromoney’s Qatar

Conference during December. The event provided

critical insight into the state of the global economy

and the MENA region’s growing role as a centre for

Islamic-based finance, with Shariah-compliant assets

estimated to be worth $1.4trn in the next two to three

years.

Source: Khaleej Times, December 12th

GOLCER sees Islamic banking in MENA having some

particular characteristics which are liable to make the

industry in the region flourish. Banks in the region

contain an ‘Islamic orientation’, given the majority

Muslim population. MENA already accounts for more

than the half of the global figure given for Islamic

finance assets.

Indonesia aims for insurance legislation

Insurers in Indonesia, reflecting South-east Asia’s

largest economy, are proposing a new law that will

require the spin-off of their Shariah-compliant units.

This move is expected to reshape Indonesia’s Islamic

insurance market. A draft law is now with parliament,

but remains under discussion and may not be

stipulated this year. It will cover all areas including

licensing, market conduct, and corporate governance

for both takaful and non-takaful firms. Indonesia’s

takaful sector has attracted global firms keen to

capitalize on rapid economic growth in the world’s

most populous Muslim country, with 240 million

consumers.


It seems that Indonesia’s step is an example that 2014

is bringing more support and promise for the industry

worldwide and in general. Initiatives, regulations

and accountancy rules appear to be accumulating.

GOLCER thinks that such legislation will help the

country’s nascent Islamic finance takaful market,

which still lags behind neighbour Malaysia’s. It’s time

for the industry to have a solid platform supporting

Islamic banking, in order to allow fair competition

with the conventional sector, which already has a long

history of operation.

Page 5

Page 6

IFSB seeks to tighten oversight

The Kuala Lumpur-based Islamic Financial Services

Board (IFSB) is revising guidelines on the supervision of

Islamic finance institutions around the world, helping

tighten regulatory oversight of industry practices.

During 2013 the body issued separate guidelines on

liquidity risk management and stress testing, while it

is currently reviewing a draft on capital adequacy. The

187 members of IFSB are likely to bring during 2014

more detailed guidance in response to the global

financial crisis, following the trend towards tightening of

regulation among conventional financial markets. Revised

guidelines detail criteria for using sukuk as tier-1 and tier-2

regulatory capital, a practice pioneered in the past year by

Islamic banks in the UAE and Turkey. The latest update by

IFSB complements stricter Basel rules, agreed globally in

an attempt to make banks safer after the 2007-09 credit

crisis.


GOLCER finds that guidelines provided by the IFSB,

while important, lack additional clarification and details

compared to the growing sophistication of the global

Islamic banking industry. Still, IFSB represents one of the

main standard-setting bodies for Islamic finance, and

has been gaining prominence in several majority-Muslim

countries.

Pakistan’s Islamic banking committee

As a marked forthcoming step in one of the largest

Muslim-population countries, Pakistan’s Ministry of

Finance has set up a committee to explore areas for

promoting Islamic banking. This is not the first such

initiative – for instance, regulators have already worked on

a media awareness campaign. The aim is to expand Islamic

banks’ share of the total banking sector to 15% by 2017.

The committee will submit recommendations on ten areas

by December 2014, covering legal hurdles to converting

banks into Islamic ones and the changes required to

remove those obstacles.


GOLCER believes that, in advancing this initiative,

it’s time for Pakistan to build a long-term, healthy

prospect for its own Shariah-compliant sector, as

well as improve the regulatory environment, given

that the industry is increasing in size country by

country across the world.

Four major Islamic market-based drivers are shaping

the growth and prominence of the Islamic economy.

These drivers are (i) demographic, (ii) Islamic values-

driven consumption, (iii) economic growth, and (iv)

intra-OIC trade growth.

In addition, four major global environment-based

drivers are also facilitating this Islamic economy.

These are: (v) global multinationals participation, (vi)

global markets seeking opportunities, (vii) growing

ethical consumption, and (viii) the revolutionizing

communication technology.

These drivers can be discussed in turn.

(i) Large, young & fast-growing global Muslim

demographic

The world’s Muslim population is expected to rise

from 1.6bn in 2010 (23.4% of global) to 2.2bn by

2030 (26.4%), according to Pew Research Center’s

Forum on Religion & Public Life.

The ‘youth bulge’ among Muslim populations in the

Arab countries is now a well-known phenomenon.

Today, people under 30 make up about 60% of the

population of these countries. While the Pew Report

projects that the ‘youth bulge’ is peaking, it also

expects the global Muslim population to remain

comparatively youthful for decades to come.

By 2030, 29% of the global young population (15-29)

is projected to be Muslim. The implication presents

significant economic challenges (job creation,

training and education) for the host economies,

as well as opportunities (young consumer market,

entrepreneurship engine).

(ii) Large & fast-growing Global Islamic economies

The 57 mostly Muslim-majority member countries

of the OIC (Organization of Islamic Cooperation)

represented 8.9% of global GDP in 2012. These

economies are also growing at a faster rate than the

global economy. The projected growth of the OIC

markets 2013 through 2018 is expected to average

6.3%, compared to the global 5.3%, based on IMF

projections.

(iii) Islamic ethos/values increasingly driving

lifestyles and business practices

Islam is seen by Muslims as a way of life. The

unique Muslim lifestyle consumer drivers are

centered around food (‘halal’ options), family-

friendly environments, accommodation of religious

practices, gender relation nuances, modest clothing,

education, finances, and many other areas.

Many of these values have universal appeal, and

thus many products and services do not have to

be exclusively positioned for Muslims. An example

is that the majority of Islamic finance customers

in Malaysia are non-Muslims, attracted by its risk-

sharing, ethical and non-interest based financing

models.

According to a 2012 study by The Pew Forum,

87% of Muslims globally consider religion ‘very

important’, and 93% fast in the month Ramadan. In

essence, faith as a key market attribute is already

real and growing for Muslim consumers. The global

Islamic finance market (on risk-sharing, ethical, and

non-interest based financing models) has over $1.3

trillion in assets, and continues to grow in the 10-

15% range per annum.

Defining the Global Islamic Economy

by Sayd Farook and Rafi-uddin Shikoh

Viewpoint

Page 7

Halal food consumption market is potentially

over $1 trillion, representing 16.6% of the

global food expenditure. Other emerging

sectors include travel, clothing/fashion,

pharma/cosmetics, media and recreation. In

travel, many Muslim travellers are travelling

to ‘Muslim-friendly’ travel destinations (e.g.

Turkey, Malaysia), given values-based affinity,

security, comfort (e.g. halal food, family-friendly

environments, prayer facilities, etc).

(iv) Intra-OIC trade growth

There is a clear drive to develop intra-OIC trade,

which is also facilitating development of the

Islamic economy sectors.

Intra-OIC trade among the 57 mostly Muslim-

majority member countries has grown to 17%

from 13% in 2000. In 2005 the OIC had set a

target of 20% Intra-OIC trade by 2015.

As an example, Malaysia’s trade with the UAE

reached $8.0bn in 2012 increasing from $6.8bn

in 2011, making the UAE Malaysia’s largest

trade partner. This growth is facilitating Islamic

finance and halal food related-trade as well.

(v) Participation of global multinationals

The OIC countries are very much an integrated

part of the global economy as suppliers and

consumers, as well as providers and seekers of

foreign investments.

This global interconnectedness is driving global

companies -- ranging from banks globally

(Deutche Bank, HSBC, Citi) to consumer product

and retail companies (Nestle, Carrefour) -- to

not only participate but also lead in the Islamic

economy development given their large scale

and stature. Their engagement gives the Islamic

economy sectors much global credibility and boost.

(vi) Developed economies seeking growth markets

Developed economies are seeking new growth

markets. Asia in particular has been a region where

much of the focus is centered.

Political changes in the Asian markets, the ability

to broaden governments’ horizons with regards to

investments, and relatively easy and inexpensive

communication are all factors that have led

developed economies to quadruple their direct

investment within a decade.

(vii) Ethics and social consciousness globally

influencing industries

A growing global sentiment around ethical- and

socially-conscious businesses is emerging. The

recent global financial crisis raised alarm bells

globally, with financial services regulators, business

educators and consumers all reassessing the ethical

focus of various business practices.

In addition, various large-scale integrity issues in

the global food value chain as well as a growing

concern around inhumane animal treatment in

food production, together with the environmental

impacts of an increasingly crowded world and

economies, are all having tangible impact on

government policies, education systems and

consumer behaviours. These trends are also

influencing the potential of Islamic economy

sectors that have ethical and socially-responsible

underpinnings.

(viii) Technology and connectedness

Communication technologies are revolutionizing

every possible area of our lives. The internet

connected the world like never before, and now

major global platforms of social media and mobile

Page 8

Page 9

services are giving a big boost to develop the globally-

distributed, fragmented demand for halal food,

Islamic finance and related lifestyle services. Muslim

consumers are a big part of this digital revolution. The

cellular subscription base of Muslims globally is 1.3bn,

21% of the global figure.

Primer on the Islamic Economy

What do we mean by the Global Islamic Economy?

The global Islamic economy has core sectors and

their ecosystems, which are structurally affected by

Islamic values-driven consumer lifestyle and business

practices.

These core sectors are primarily centered around

financial services and food, but also include lifestyle

sectors of travel, clothing/fashion, pharmaceuticals/

cosmetics, and media/ recreation. Other segments

include education and philanthropy.

The consumers of the Islamic economy are primarily

Muslims but also include others outside the Islamic

faith who share similar values. The specific Islamic

value-influenced consumer practices include the

consumption of halal (lawful) food, Islamic financing,

modest clothing, family-friendly tourism, as well as

other services with special considerations on gender

interactions and religious practices. The demand

also extends to business practices that seek Islamic

business financing, investment and insurance services.

The Islamic economy collectively creates value for

the consumers and economies involved. It also has

a major potential to contribute to global well-being

through its underlying socially-conscious ethos.

The potential of the Islamic economy

In aggregate, the global expenditure of Muslim

consumers on food and lifestyle sectors is being

estimated to be $1.62 trillion in 2012, and to reach

$2.47 trillion by 2018. In addition, Islamic financial

assets are estimated to be $1.35 trillion (total

disclosed), growing at 15-20% a year in most core

markets.

While the size and potential of Islamic finance

sectors have been established, it is the halal food

and lifestyle sectors with their significant potential

size that present a new set of opportunities. Key

estimates include:

• Foodmarket:$1,088bnofglobalMuslims’

expenditure on food and non-alcoholic beverages

(2012) -- 16.6% of global expenditure, and expected

to reach $1,626bn by 2018.

• Clothing&fashionmarket:$224bnin

expenditure on clothing and footwear globally

by Muslims (2012) -- 10.6% of global expenditure,

expected to reach $322bn by 2018.

• Tourismmarket:$137bninexpenditure

on tourism (not including Hajj/Umrah) globally

by Muslims (2012) -- 12.5% of global expenditure,

expected to reach $181bn by 2018.

• Media&recreationmarket:$151bnin

expenditure on recreation and cultural services

globally by Muslims (2012) -- 4.6% of global

expenditure, expected to reach $205bn by 2018.

• Pharmaceuticalmarket:$70bnin

expenditure on pharmaceuticals globally by

Muslims -- 6.6% of global expenditure, expected to

reach $97bn by 2018.

• Cosmetics&personalcaremarket:$26bnin

expenditure, expected to reach $39bn by 2018.

The authors are Global Head of Islamic Capital Markets,

Thomson Reuters, and Managing Director of Dinar Standard

respectively.

Early in 2013 the Ruler of Dubai made a

commitment for the city-state to become the global

hub of the $300bn market in Islamic bonds, part

of the strategy to develop Dubai as central to the

global Islamic economy, integrating other segments

such as halal food and cosmetic production.

The emirate itself raised $1.25bn in January in a mix

of conventional fixed-interest instruments with a

$750m Islamic tranche.

Global sukuk issuance reached $140bn in 2012,

up 64% from $85bn in 2011, according to Zawya.

Issuers from the UAE accounted for $6-7bn of that

total.

With yields on a downward trend, issuers were able

to lock into low (US$-related) rates for the medium

term, although investment banks questioned

whether the market’s price gains of the previous

two years would continue, given that inflation

and interest rates may rise in tandem with global

economic recovery.

Currently the nominal value of sukuk listed on Dubai

exchanges is estimated at $10.6bn, the third largest

in the world.

Over ten years total sukuk issuance had soared

from $5bn in 2003, according to Ernst & Young,

providing an equivalence of financial instrument

with conventional bonds, while structured to meet

Shariah’s requirements.

“Sukuk trade like bonds, clear like bonds, settle

like bonds, and are rated like bonds by the same

ratings agencies”, says Nigel Denison, head of wealth

management and treasury at Bank of London and

Middle East.

They also offer flexibility, with a number of structures

possible, with a lease-back approach commonly used.

If an income-generating asset is present, receivables

can be securitized. Otherwise, other structures can

be utilized, such as profit-sharing. Issuers mainly are

sovereigns, Islamic banks and corporations.

In the first half of 2013, $61.2bn of sukuk issuance

was placed. Yields in the GCC jumped 43% in Q2,

to 4.2%, but subsequently receded to around 3.9%,

according to the HSBC/Nasdaq Dubai Index.

The Islamic Development Bank, based in Saudi

Arabia, issued $1bn of sukuk in June. Al Hilal Bank

of Abu Dhabi in October issued $500m of sukuk,

oversubscribed twelve times.

Non-Muslims can both buy and issue sukuk, and

“European governments have indicated a desire

to issue sukuk to tap the additional pool of Islamic

liquidity”, says Khalid Howladar, senior analyst at

Moody’s.

“Overall, we believe the demand for sukuk worldwide

is $800bn to $1 trillion, says Ashar Nazim, Islamic

The corporate choice between bonds and sukuk

by Rachel Latham and Andrew Shouler

Feature

Page 10

“Sukuk trade like bonds, clear like bonds, settle like bonds, and are rated like

bonds”

Page 11

financial services leader at Ernst &Young. “The supply

is $250bn. So you can imagine, demand is three times

or more what supply is today.”

Still, the fact that supply doesn’t keep up with demand

means buy-and-hold investors predominate, so that

sukuk remain somewhat less liquid than conventional

bonds.

Sukuk yields used to be correspondingly higher than

for conventional bonds, but that differential has either

closed or even overlapped as liquidity has improved.

In the Gulf region Islamic bonds are not only meeting

refinancing requirements, but also funding massive

infrastructure spending. Prominent examples include

the power & water sector (names like Saudi Electricity,

SEC, and Dubai Electricity & Water Authority, DEWA),

and events like the 2022 FIFA World Cup in Qatar.

Demand for sukuk in the GCC is likely to continue

growing at double-digit rates in the next two years,

rating Standard & Poor’s says. SEC broke fresh ground

with its 30-year maturity issue this April, “illustrating

that the market is broadening and innovating”.

As for sector suitability, bankers say that sukuk are

ideal for the airline and aviation industry because of

the match between the long-term nature of the assets,

with a regular income stream from passenger traffic,

and the structure and tenor of the securities.

Similarly, airport infrastructure may be implicated

too. Kuala Lumpur International Airport and the

international terminal at Istanbul’s Ataturk Airport

involved large Islamic financing tranches.

It’s also said, though, that sukuk are not necessarily

a better financing option but are simply a different

option in terms of securing an alternative source of

funding. Capital market products generally allow for

deviation from the commercial bank route, which has

been constrained in recent times.

Several airlines, such as Turkish Airlines and Malaysia’s

budget carrier Air Asia, have indicated that they

are exploring the possibilities of financing new

fleet acquisitions and expansion through Shariah-

compliant methods.

In March this year Emirates Airlines and Malaysia

Airlines sought funds to finance fleet acquisition

and expansion. Both companies had issued Islamic

papers previously.

Saudi Gazette reported that an estimated sixty

transactions valued at nearly $10bn have been

completed for various airlines and airline leasing

companies over the last three decades, with “very

familiar and comfortable” documentation involving

Shariah-compliant structures related to purchasing,

maintenance and insurance.

By the time Emirates launched its $1bn amortising

sukuk in March, it had already tapped global debt

markets (in January) for a $750m amortising bond,

which Reuters reported “received a muted response

due to weak market sentiment at the time”. It had

also issued two smaller export credit agency-backed

deals this year.

The March sukuk, maturing in 2023, carries an

“Bankers say sukuk are ideal for the aviation industry

because of the nature of the assets and the structure and

tenor of the securities.”

Page 12

average weighted life of five years and was launched at

300 basis points over five-year mid-swaps, at the tighter

end of the nominated range, and was sold to investors

in MENA, Europe, Asia, and offshore US accounts.

Clearly, it seemed the decision was strategic for

Dubai, not just a corporate financing matter. Emirates

chairman and CEO Sheikh Ahmad Bin Saeed Al

Maktoum told media the aim was “to confirm our

support to the initiative of Dubai becoming the world

capital of Islamic economy.”

Market conditions deteriorated in the spring, however,

with speculation over the US Federal Reserve’s reduction

of its bond-buying programme (QE), which provoked an

alarming reaction in emerging-market debt.

Average yields on global corporate sukuk increased

46 basis points to 4.62% in the two months following

the Fed’s tapering declaration in June (HSBC/Nasdaq

Dubai Corporate US Dollar Sukuk Index). The yield on

Emirates’s $1bn sukuk increased 31 basis points in that

period to 5%.

However, Emirates continues confidently to expand. A

company spokesman revealed this year that the Dubai

carrier will need an average of $5.3bn a year over the

next five years to finance 119 aircraft deliveries. The

company could access the sukuk or non-Shariah-

compliant bond market early next year, he said.

The market volatility that arose in mid-year “is not ideal”,

he admitted, but it “has not stopped us from issuing

bonds in the past.” Still, the availability of funds might

become a headache. “If the banks are having their own

problems or the bond markets collapse -- that will affect

us,” he conceded.

Other options for funding are commercial debt,

operating leases and export credits. There are no known

plans for an IPO.

Cash raised for next year will finance the delivery of 21

aircraft including ten Airbus A380s, nine Boeing 777-300

ER and two Boeing 777 freighters. “We have pretty much

the same strategy for the next financial year as this year.

It’s going to be a diversified structure,” the spokesman

confirmed.

Based at one of the busiest airports in the world (with

over 32m passengers passing through in 2013H1, up

17%), Emirates has witnessed astonishing growth.

At this year’s Dubai airshow, it again rewrote the record

books with an order for 150 Boeing 777X, comprising

35 Boeing 777-8Xs and 115 Boeing 777-9Xs, plus 50

purchase rights; also an additional 50 Airbus A380

aircraft.

Together, these orders, excluding purchase rights, are

worth an estimated US$ 99bn at list prices, truly a vast

sum. “We believe business will come,” said Tim Clark,

President of Emirates.

Snapshot of Emirates airline

The Dubai government-owned airline, launched in

1985, currently flies to 137 destinations in 77 countries.

Reporting its 25th year of consecutive annual profits,

Emirates group announced net profit of $845m for

the year to March 2013, up 34% year on year. Group

revenues grew 17% to $21.2bn. The airline carried a

record 39.4m passengers, up 16% on the previous year.

At the group’s cargo business, contributing 15% of the

airline’s revenues, tonnage rose 16%, while revenues

grew 8%.

Profits have surged in the last two years, with more

routes and more passengers, but the latest results show

the airline to be affected by the fuel and exchange rate

issues that have hit other large global players. For the

half-year period to September 2013 the company only

marginally improved net profit to $475m, despite a 15%

rise in passengers to 21.5m.

Page 13

Financing analysis

A recent teaching note by Emir Hrnjic, Harun Kapetanovic

and David Reeb for the Richard Ivey School of Business at

the University of Western Ontario contained the following

remarks on the $1bn Emirates issue --

In June 2012 Emirates repaid a $550 million sukuk bond

used to finance plane purchases in 2005. In February

and March 2013 it raised $1bn in sukuk at a profit rate of

3.875%, and $750m from 12-year amortizing regular bonds

at a coupon of 4.5%.

Sukuk bonds are essentially equity-based securities

with promised profit rates (in negative profit years,

sukuk bondholders still receive payment based on the

expectation of future profits), which requires special

accounting and tax rules to make them competitive with

conventional bonds.

From this perspective, it seems that Emirates’s sukuk has

higher risk than conventional bonds, and should have

had higher (not lower) yield. [In fact] the sukuk had a

lower yield. This difference seemed at odds with several

conventional finance theories. This lower financing cost

might have been one of the key reasons for issuing sukuk

bonds.

Sukuk bonds seek to replicate conventional bonds and

receive similar accounting and tax treatment in Islamic-

friendly markets. However, the equity-based nature of the

sukuk bond provides substantial difficulty in providing the

same priority as senior conventional bonds. Moreover,

bankruptcy courts could potentially invalidate any stated

rule that gave an equity-based security the same priority as

a conventional bond.

During the crisis in 2009, it seems that Dubai credit was

‘too big to fail’. Government-related entities (GREs) that

were central to the local debt crisis are closely linked to

(owned by) the ruler of Dubai and/or Government of Dubai.

Possible default would have set a negative precedent,

[with] a ripple effect in the investor community. However, it

is not clear that Islamic bonds would be more favoured in

the event of a bailout.

A firm issuing both conventional and Islamic bonds would

be able to achieve better pricing with sukuk by favouring

Islamic financial institutions (IFIs) and their inherent

demand for sukuk. An issuer such as Emirates airline,

with a large issue of U$ 1bn and strong and recognizable

credit profile, would be able to aim to reduce its cost of

finance by using a sukuk structure.

Analysts differ on the best alternative as to the financing

of further aircraft orders. Some have favoured repeating

the sukuk issue, some appeared focused on exploring

other types of sukuk, and others have leant towards

conventional financing arrangements. Big decisions

remained for the treasury department.

[Yet], Emirates is a privately held company with a variety

of financing options available. In addition, it should be

underscored that its treasury function has a strong track

record with external capital markets due to successful

prior issuances.

Its decision should not therefore be confined to which

debt instrument to use or whether to use bilateral bank

financing; rather, it should include the option of raising

equity as well.

A primary decision is the choice between equity and

debt. Capital increases using the equity path would

include going public (IPO), private sale and capital

increase from the same shareholder. Debt-like options

include the choice between conventional bonds, sukuk

bonds, or lease agreements. Arguably, issuing sukuk

bonds provides an additional source of funding that

does not entail providing voting rights to external capital

markets.

In respect to sukuk structures, an asset-intensive industry

such as airlines allows the deployment of a variety of

asset-based structures. The motivation behind issuing

a sukuk as opposed to issuing a conventional bond

[involves] diversity of investor base and funding method.

The lack of credit rating has not impeded the company’s

ability to raise funds. For 2014 Emirates plans to issue

regular bonds and up to $4.5bn of sukuk. Issuing in both

markets would continue (despite the different costs of

capital), owing to different demand curves and investor

interests.

Sources: Reuters, Bloomberg, Financial Times, Saudi Gazette,

Gulf News, Gulf Times, Dow Jones, Emirates press release,

Harun Kapetanovic (Dubai Dept of Economic Development)

GCC

Gulf bourses mostly maintained their form through

November, spurring gains for the year to 25%

on an aggregate basis. Qatar’s index was best-

performing, having been softest in prior months,

driven by real estate, banks, transportation and

industrials. Saudi Arabia’s Tadawul index also

recovered some vigour, turning its attention from

disappointing Q3 results towards better outcomes

expected for Q4. In a further switch of trends, both

UAE markets were hesitant by comparison, keeping

watch ahead of Dubai’s ultimately successful

Expo 2020 bid. Kuwait, meanwhile, continued

to underperform, by some distance on the year.

Investors were sidelined by the suggestion of

measures to be taken against speculation. Oman

and Bahrain were relatively sideways on the month.

MENA

The persistence of political wrangling provoked

weakness in the Egyptian market, offsetting some

of the relative buoyancy achieved in quieter

conditions in recent months. Disputes among the

50-member panel writing another constitution

for the country led to premier El Beblawi

declaring a charter referendum for the new year.

The government also enacted a toughening

of legislation surrounding public protests,

adding to nervousness and uncertainty.

During December, however, the central bank’s

unexpected cut to interest rates lifted the

mood, in the wake of modest quarterly growth

data in the last quarter. Reflecting that renewed

thrust, key lender Commercial International

Bank jumped over 6% to its highest level since

1997.

Far East

Asian markets were slavish followers of

economic trends in China and the prospects

for tapering of US economic stimulus, but there

were variations related to particular domestic

issues. Thailand’s political troubles stood out,

with an anti-government protest movement

amassing at government offices, determined to

Stock Markets

Page 14

oust prime minister Shinawatra, who eventually

dissolved parliament and called a snap election.

Upbeat trade data out of China helped boost

Vietnam to a six-month high, and Malaysia’s main

index reached an all-time peak upon impressive

export statistics. Still affected by the devastation

of typhoon Haiyan, the Philippines saw stocks

settle at a three-month low. Otherwise regional

accounts were subdued in trading volumes ahead

of the year-end, but also waiting especially for

indications of the Fed’s monetary policy stance in

response to latest jobs numbers.

Rest of the World

Global equity markets were broadly positive

overall, essentially heartened that the US’s QE

programme would continue while leaning

to determined support for the economy and

financial assets. The announcement of Janet

Yellen as new Fed chair underscored the point.

US stocks hit all-time highs, boosted by Q3

GDP data exceeding forecasts and, for instance,

the housing sector illustrating faster activity.

European bourses were helped by an ECB rate

cut, seeking to ward off deflation in the eurozone,

collectively still in some difficulty. Japanese

indices approached 6-year highs in mirror image

of yen competitiveness, with Abenomics still on

trial. Emerging markets, meanwhile, generated

negative returns, in line with doubts over the

potential withdrawal of stimulus in the US. Latin

America proved most exposed in this regard.

Sources: GIC, Global Investment House, Emirates

NBD, Bloomberg, Reuters, broker reports

Page 15

Islamic or Shariah compli-ant indices exclude indus-tries whose lines of busi-

ness incorporate forbidden goods or where debts/

assets ratios exceed 33%. The increasing popular-ity of Islamic finance has

led to the establishment of Shariah compliant stock

indices in many stock markets across the world, even where local Muslim populations are relatively

small, such as in China and Japan.

Volatility is a measure of un-certaincy of market returns. It is calculated as the standard

deviation of the returns in the reported month. The formula for the standard deviation is:

σ=E[(X-μ)2]1/2

Islamic Stock Indices

Conventional Stock Indices

Evolution of Islamic Stock Markets in November 2013 for GCC, Far East, Middle East North Africa (MENA) and Rest of the World markets. Prices represent the closing price of the respective index at 29/11/2013. Percentage Month-to-Month (MTM) Change and percentage Volatility. Source: Datastream

Evolution of Stock Markets in November 2013 for GCC, Far East, Middle East North Africa (MENA) and Rest of the World markets. Price represent the closing price of the respective index at 29/11/2013. Percentage Month-to-Month (MTM) Change and percentage Volatility. Source: Datastream

Page 16

CommoditiesOil

In Brent and related series the price dip seen

in November was more than unwound in the

remainder of the month and into December as

confidence grew in the prospects for the world

economy -- particularly in respect of the US

and China -- and therefore crude demand. Oil

generally was initially subdued by a series of

stockpile numbers that suggested the market

would be well supplied, then by the news that

sanctions on Iran might be eased and its exports

restored. The scale of build-up in US inventories

weighed especially on WTI, but prices snapped

back when it seemed pipeline delivery to the

Gulf Coast might act to drain the excess. Signs

of a stronger American consumer were offset,

though, by concerns for counterpart Fed

tapering.

Natural Gas

While scope exists for price reaction to inventory

movements and to chart indicators, analysts

confirmed that gas would trade very much

in line with weather forecasts, or, precisely, in

inverse relation to predicted temperatures. In

much of November warmer conditions across

much of the US meant that both residential and

commercial demand sagged, as did that from

electric generators. Forecasts of a colder front

during December then boosted prices again,

beyond the $4 mmBtu level. But technical

indicators pointed to overbuying, and heating

requirements were expected to drop later in

the month as milder conditions were predicted

again. The prospect of frigid weather early in

January thereupon prompted another uptick.

Gold

In recent weeks gold could not contain its slide,

except when offsetting easing of the US dollar,

and prices are heading for their first annual

decline for 13 years. The pervading notion that

Page 17

the Fed will soon enough begin tapering its stimulus

programme upon economic recovery gathering

momentum has curbed interest in precious metals.

A budget accord in the US had similarly softening

effect. As it turned out, tapering talk was validated in

mid-December, and gold’s enduring purpose as a safe

haven was thereby undercut. Market participants may

hope only that the experimental monetary strategy will

still tend to prod inflation out of a comfortable zone if

the determined policy stance overreaches.

Copper/Base MetalsIn common with the world economy of which it is

supposed to be a barometer, copper maintained

a moderate tendency in the same period, with the

speculative element flipping from long to short

positions. Equally, similarly to many other markets,

downward influence came from the general expectation

of Fed tapering, while the counterpart factor of the

US economic rebound steadily developing kept some

upward tilt to prices. Stockpiles in Shanghai and

London diminished with an improvement in orders,

while robust manufacturing data out of both China and

the US also lent firmness, as did a strike at a Chilean

smelter.

Sugar/Agriculturals

Whereas agriculturals likewise kept a sideways range,

sugar continued to suffer, experiencing what was

described as a rout. A third straight annual decline

beckoned, and a fourth year of surpluses. Production

surges from Thailand, India, Australia and Brazil have

followed with a lag the incentive of the higher prices of

2011, and bumper crops have arisen this year. A global

glut has resulted, as consumption, though growing,

has not kept the same kind of pace. Brazil’s pledge to

extend its currency intervention plan in favour of the

real fuelled sales of the sweetener in US dollar terms.

Likely conversion of sucrose for ethanol output may

restrict the slump.

Edible Oils

Although palm oil usually eases during this season in

the northern hemisphere (as it tends to solidify), its

Page 18

impetus this year has been sustained, with government

initiatives in Indonesia and Malaysia to promote biofuel

keeping stocks in check. However, if crude oil prices should

themselves ease back, then the demand for the ‘green’

substitute would be trimmed. The weather was supportive

in recent weeks, though, as monsoon floods impeded

both harvesting and transportation. Palm oil prices were

nevertheless restrained by the narrowing discount to the

rival soybean, whose fulsome crops had impact.

Sources: OPEC, Reuters, Bloomberg

GCC

Gulf bonds were caught between international

prompts, as signs of economic recovery in the US

and Europe diverged, while the strength of activity

in China and Japan continued uncertainly. However,

regional trading outperformed that of emerging

markets. The market was fragile among sovereign

CDS, with spreads widening across the space. That

was notable in the case of Dubai, whose credits

benefited from the winning Expo bid but whose

funding requirements in the next few years were

estimated at elevated levels. A defensive mood

spread ahead of year-end, as players took to the

sidelines, conscious also of the pipeline of supply

that could become difficult to digest, although

liquidity remained solid enough.

Egypt / MENA

Central Bank of Egypt’s surprise rate half-point

rate cut barely affected the country’s foreign-

currency debt yields, signalling both an economic

weakness that needs to be corrected to improve

national finances, but also a lack of inflationary

pressure. Donations by Gulf states have otherwise

given the authorities some room for manoeuvre,

allowing sufficient confidence for locals to invest

in government securities, bringing domestic yields

tumbling. S&P’s rating upgrade in mid-November

also helped, and the Egyptian pound found

reasonable stability below 7/$. All eyes became

trained on the public vote on a new constitution

scheduled for January.

Malaysia / Far East

Asian bonds have suffered conspicuously over

the rumours and shifting timeline of the US Fed’s

monetary tapering, as the impact of concerned

speculation compounded the revealed reaction

of regional markets earlier in the year when the

move was initially suggested. Malaysia’s ringgit

experienced nine straight weeks of decline, the

longest for eight years. Some 30% of the country’s

Bonds and CDS markets

sovereign bonds is held by overseas accounts. Asia’s

bond markets have reacted very poorly both to US

benchmark yields and their implications for the dollar.

Malaysia’s quickening inflation rate added to the

pressure.

Global Benchmarks

Beyond the short end, interest rates rose right across

Page 19

Credit Default Swap Markets

Sovereign Bond Markets

Evolution of Bond Markets in November 2013 relative to the previous month. The table reports the price index on which the MTM Change is calculated (month-to-month) and the Yield of sovereign bond maturities typically between 6 months and 25 years. Data as at 29/11/2013.

Evolution of CDS Spreads in November 2013 relative to the previ-ous month. The index reported here represents the average ba-sis points (bp) of a 5-year CDS for protection against sovereign bonds. Data as at 29/11/2013. MTM Change refers to the change relative to the previous month.

the US yield curve in November, responding to

stronger economic data, particularly the payrolls

report. The market believed the improvement

increased the chance of the Fed curtailing its QE

programme. However, incoming chair Janet Yellen

quelled fears at her confirmation hearing. When

the Fed announced in mid-December a tapering

from $85bn of bond purchases to $75bn per month,

prior discounting of the decision mollified the

market reaction. The policy pointer given that no

precipitative rate hike would be seen also sweetened

sentiment. In Europe the policy manipulations of

the ECB, in tending to the needs of the struggling

eurozone, continued to create a mixture of comfort

and doubt in the market, with a background of deep

uncertainty over the plausibility of lasting economic

recovery and the technicalities of any banking union

as proposed and apparently required.

Source: GIC, InvestAD, Capital Economics,

Bloomberg, Financial Times, broker reports

Page 20

Islamic Bonds (Sukuk)

While in the secondary market mainstream bonds and their

Sharia-compliant equivalents both depended on the mixed

economic and policy news from the US especially, on a total

return basis sukuk slightly outperformed the conventional.

HSBC’s Nasdaq-Dubai GCC USD Sukuk/Bond TR Index

(GCCB) finished flat in November, though spreads widened

by 4bps, yielding 4.02%. The USD Sukuk TR Index (SKBI)

ended marginally up, while the GCC Conventional USD

Bond TR Index (GCBI) were marginally down.

The primary market was moderately active, and issues were

well bid.

Saudi real estate company Dar Al Arkan appeared with a

three-year $300m (SAR1.1bn) sukuk that was issued at a

profit rate of 5.75%, the second tranche under its sukuk

programme.

Qatari telecoms firm Ooredoo launched a $1.25bn, five-year

sukuk, the firm’s maiden Islamic bond. The benchmark-

sized issue has a profit rate of 3.039%. The proceeds were

for general corporate purposes, including re-financing

existing indebtedness.

Saudi-based water and power project developer ACWA

Power raised a 1.77bn riyal ($471.9m) Islamic loan (5-year

revolving credit facility) from four local banks to help

finance investments including acquisitions and act as a

bridge to a sukuk issue next year. No pricing was given but

the statement compared it favourably with that for regional

peers and with recent issuances by Saudi and regional

government-related entities. ACWA is expanding rapidly

across the MENA, hoping to at least double its power

generation capacity and water production capabilities.

Aldar Properties, Abu Dhabi’s property development,

investment and management company announced

its completion of a $750m capital-raising via a 5-year

sukuk. The transaction, the company’s first foray into the

capital markets since the merger with Sorouh, was priced

competitively at a spread of 290bps over US$ mid-swaps

for a fixed profit rate of 4.348%. It was integral to the firm’s

debt strategy, focused on reducing the cost of borrowing,

extending its maturity profile and lowering leverage levels.

Saudi Hollandi Bank privately placed a 2.5bn riyal ($666.6m)

tier-2 sukuk to support the bank’s capital base. It has a

Sukuk is the Arabic name for financial certificates, but commonly refers to the Islamic equivalent of bonds. Since fixed income, interest bearing bonds are not permissible in Islam, Sukuk securities

are structured to comply with the Islamic law and its investment principles, which

prohibits the charging, or paying of interest. Financial assets that comply with

the Islamic law can be classified in ac-cordance with their tradability and non-

tradability in the secondary markets.

Source: HSBC Nasdaq Dubai

tenor of ten years, and carries a half-yearly profit of

6-month Saudi Interbank Offered Rate (SIBOR) plus

1.55%.

Saudi British Bank (SABB), an affiliate of HSBC Holdings,

completed a 1.5bn riyal ($400m) capital-boosting

sukuk issue. With a lifespan of seven years, it contained

a clause allowing redemption at five years, and was

priced at 1.4% over 6-mth Saibor.

Sources: GIC, Invest AD, Bloomberg, Reuters, broker

reports

Page 21

Perspective

By contrast with financial markets which have been

shaped in 2013 very significantly by US monetary

impetus, real economies and sectors depend over

time on less artificial, more structural drivers. Islamic

finance & economy has been quite well focused this

year as one such segment of activity worth watching

seriously.

Whilst the positive attributes of the industry have

been much trumpeted, however, there has equally

been an acknowledgement, at well-attended forums

in key centres such as London and Dubai, that

negative strains persist that may still dampen its

prospects. Anecdotally, this fact became particularly

apparent by engaging with the content and

delegated representation at Dubai’s Global Islamic

Economy Summit in November. A handbook for

the event gave a rosier view than certain opinions

expressed in the lobbies.

In their literature in support of the forum, Thomson

Reuters and Dinar Standard undoubtedly gave

an impressive, comprehensive account of the

opportunities for the Islamic dimension across a

range of economic sectors, indicating its genuinely

massive potential. Authors Sayd Farook and Rafi-

uddin Shikoh, of the two organizations respectively,

listed eight factors favourably motivating the Islamic

market in the years ahead.

Four of those were related to trade and growth,

namely: the demography of the world Muslim

population; consumption trends directed by Shariah-

compliant values; the economic growth profile

of the relevant countries; and the intra-regional

trade prospects of the OIC states. Four ancillary

factors were: the emerging presence of globalized

companies in the Islamic space; the interest of

investors in the growth markets of developing

nations; growing sentiment since the global

financial crisis in favour of socially-conscious business;

and the impact of communication technology in aiding

connectedness.

These are ideas with a certain credibility, whose collective

merits should bring weight to the sector in the course

of time. Yet, there is still the matter of delivery, and the

presence of constraints. Buttonholed by Laurent Marliere,

CEO of Islamic legal consultancy IsFin, I was reminded

that particular themes have become ingrained as snags

impeding development.

Thus, while Islamic finance “prides itself on ethical

governance”, it remains troubled by a “lack of maturity,

and conflicts of interest”, he said. Most obviously,

its standards, and the control and the certification

of Shariah-compliant products, are not evolved

internationally. That expert scholars are found only

in very limited numbers “leads to an unhealthy

concentration of expertise”, he added.

On the aspect of reputation, Marliere was very critical

about professional migrants from conventional banking

whose independence and motivations are doubtful. That

brickbat was tempered, though, by the observation that

Islamic finance too can harbour unhelpful inconsistencies,

such as when “the advisor happens to be the certificatory

body as well”, an element that may feature in efforts to

organize the industry. Other frailties of the sector he

mentioned are very familiar, like the inadequacies in risk

management or limitations of existing marketing.

So the conjuring that Islamic finance & economy has

to perform is – unsurprisingly, and often the way -- to

convert potential into delivery. Plans may well come to

fruition, but to do so will require not only the willpower

of those in positions of authority who may help facilitate

market appetite, but the imagination to find ways of

overcoming bumps in the road.

Islamic finance & economy’s motorway has potholes to be fixed

by Andrew Shouler

Page 22

Call for PaPers4th Islamic Banking and Finance Conference (IBF 2014)

23rd to 24th June 2014Venue: Lancaster University Management School

Keynote Speaker

Thorsten BeckProfessor of Banking and Finance, Cass Business School

The constraints applied by Islamic banks rendered them more resilient in the recent financial crisis compared to their con-ventional counterparts. This has attracted the attention of market participants and researchers to their liquidity buffers, leverage ratios, managerial efficiency and bespoke financial products. Islamic banking products are now offered in more than twenty countries and their expanding suite includes bonds, equity indices and insurance. The sector is estimated to exceed $1trillion in value, while growing at about 15% per annum. Among many issues still subject to debate is the purity of Islamic finance in practice, given the need to compete and to operate with customers whose expectations have been formed by conventional banking practices.EIBF centre at Aston Business School in collaboration with GOLCER Lancaster University Management School is organis-ing a conference on Islamic Banking and Finance. The conference aims to provide a forum for an exchange of views on recent developments and to identify key issues/challenges underlying the paradigm of Islamic Banking and Finance in the 21st century.

Original contributions are invited on any of the listed topics:

• Financial risk and stability • Risk Management, Accountability and auditing• Transparency, governance and corporate social responsibility • Competition• Earnings management and impression management • Microfinance and SMEs• Performance, efficiency and convergence • Behavioural finance• Mutual funds

Special IssueJournal of Economic Behaviour and Organisation (JEBO)

Ana Timberlake Best paper Research Award: £500

Co-editors for the JEBO Special IssueOmneya Abdelsalam, Aston UniversityMohammed El-Komi, American University of CairoAna-Maria Fuertes, Cass Business SchoolStergios Leventis, International Hellenic UniversityGerald Steele, Lancaster University

Scientific committeeOmneya Abdelsalam (Aston University), Nathan Berg (University of Otago), Rachel Croson (University of Texas at Dallas), Mahmoud El-Gamal (Rice University), Mohamed El-Komi, (American University Cairo), Meryem Fethi (Leicester University), Ana-Maria Fuertes (Cass Business School), Mohamed Shahid Ibrahim (Bangor University), Marwan Izzeldin (Lancaster University), Jill Johnes (Lancaster University), Stergios Leventis (In-ternational Hellenic University), Kent Mathews (Cardiff Business School), Khelifa Mazouz (Bradford Business School), Philip Molyneux (University of Bangor), Andrew Mullineux (University of Bournemouth), Steven Ongena (University of Zurich), Vasileios Pappas (Lancaster University), Mo-hamed Shaban (Leicester University), Mustapha Sheikh (Leeds University), Gerald Steele (Lancaster University), Emili Tortosa-Ausina (Jaume I University), Mike Tsionas (Lancaster University)

Conference Organisers: Dr Omneya Abdelsalam (Aston University), Dr Marwan Izzeldin (Lancaster University)

Important DatesConference Abstract Submission

Conference Full Paper Submission

Submission for JEBO Special Issue

Special Issue Publication

31st March 2014 27th April 2014 1st October 2014 October 2015

Statistics • Econometrics • ForecastingT IMB ERL A K E

For paper submissions please email Marwa Elnahass: [email protected]

Page 23

Global Forum on Islamic Finance 2014 ConferenceDevelopments and The Way Forward

March 10-12, 2014Lahore, Pakistan

Organised byDepartment of Management Sciences

COMSATS Institute of Information Technology (CIIT)http://gfif.citilahore.edu.pk/

Research Team

Gerry [email protected]

Vasileios [email protected]

Marwa El [email protected]

Marwan IzzeldinDirector

[email protected]

DISCLAIMER

This report was prepared by Gulf One Lancaster Centre for Economic Research (GOLCER) and is of a general nature and is not intended to provide specific advice on any matter, nor is it intended to be comprehensive or to address the circumstances of any particular individual or entity. This material is based on current public information that we consider reliable at the time of publication, but it does not provide tailored investment advice or recommendations. It has been prepared without regard to the financial circumstances and objectives of persons and/or organisations who receive it. The GOLCER and/or its members shall not be liable for any losses or damages incurred or suffered in connection with this report including, without limitation, any direct, indirect, incidental, special, or consequential damages. The views expressed in this report do not necessarily represent the views of Gulf One or Lancaster University. Redistribution, reprinting or sale of this report without the prior consent of GOLCER is strictly forbidden.

Andrew ShoulerEditor

[email protected]

Documents

Islamic Finance Bulletin December 2013