Difference between revisions of "Islamic Interbank Market & Sukuk by Masood Ajazi"

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*any other use without proper permission is not allowed
 
*any other use without proper permission is not allowed
  
*corporate bonds  financial derivatives  options  swaps  future  repos  interbank markets  lender of last resort liquidity risk  investment firm firm s definition liquidity risk includes both  the risk of being unable to fund its portfolio of assets at appropriate maturities and rates and  the risk of being unable to liquidate a position in a timely manner at reasonable prices
+
*corporate bonds financial derivatives options swaps future repos interbank markets lender of last resort liquidity risk investment firm firm s definition liquidity risk includes both the risk of being unable to fund its portfolio of assets at appropriate maturities and rates and the risk of being unable to liquidate a position in a timely manner at reasonable prices
* regulators definition  risk to a bank s earnings and capital arising from its inability to timely meet obligations when they come due without incurring unacceptable losses
+
*regulators definition risk to a bank s earnings and capital arising from its inability to timely meet obligations when they come due without incurring unacceptable losses
  
*billion were found to be in liquid assets  underutilization of financial resources  lower income and higher cost  loss of competitiveness
+
*billion were found to be in liquid assets underutilization of financial resources lower income and higher cost loss of competitiveness
  
 
*of participants no lender slow of last development resort in islamic key issues in financial liquidity instruments different shari a management interpretation absence of no islamic interislamic secondary bank market market credit for this diagram iifm
 
*of participants no lender slow of last development resort in islamic key issues in financial liquidity instruments different shari a management interpretation absence of no islamic interislamic secondary bank market market credit for this diagram iifm
 
*islamic banks assets portfolio murabahah musharakah mudarabah ijara murabaha others source iqbal munawar ausaf ahmad tariqullah khan challenges facing islamic banking jeddah irti key issues in liquidity management small no
 
*islamic banks assets portfolio murabahah musharakah mudarabah ijara murabaha others source iqbal munawar ausaf ahmad tariqullah khan challenges facing islamic banking jeddah irti key issues in liquidity management small no
  
*m in ifis  investments long dated a deposits are short  massive gap asset liability mismatch  massive liquidity problem  can not borrow when there are withdrawals  excess liquidity  overwhelming use of muarabaha  sukuks oversubscribed no secondary market  shortage of instruments  lack of liquidity ironically increases demand for liquidity  liquidity vehicles cannot withstand a m injection or withdrawal  malaysia is an exception where islamic interbank market do exits believe it not
+
*m in ifis investments long dated a deposits are short massive gap asset liability mismatch massive liquidity problem can not borrow when there are withdrawals excess liquidity overwhelming use of muarabaha sukuks oversubscribed no secondary market shortage of instruments lack of liquidity ironically increases demand for liquidity liquidity vehicles cannot withstand a m injection or withdrawal malaysia is an exception where islamic interbank market do exits believe it not
*lm in ifis  commodity murabaha  commodity murabaha  commodity murabaha  commodity murabaha  deposit management  sukuk  infrastructure institutions  liquidity management center  iifm challenges of l
+
*lm in ifis commodity murabaha commodity murabaha commodity murabaha commodity murabaha deposit management sukuk infrastructure institutions liquidity management center iifm challenges of l
  
 
*the customer then sells the commodities to a third party on spot basis and gets instant cash source hsbc amanah faq how commodity murabaha works sell at a profit deferred payment buy broker conventional broker a b bank a a pay spot agent receive sales proceeds at maturity receive funds from investor to pay broker a a settle investor sales proceeds less agents fees islamic bank investor funds flow principal commodity flow credit for the diagram iifm
 
*the customer then sells the commodities to a third party on spot basis and gets instant cash source hsbc amanah faq how commodity murabaha works sell at a profit deferred payment buy broker conventional broker a b bank a a pay spot agent receive sales proceeds at maturity receive funds from investor to pay broker a a settle investor sales proceeds less agents fees islamic bank investor funds flow principal commodity flow credit for the diagram iifm
 
*commodity muarabah a panacea what is commodity murabaha commodity murabaha as it is generally known is sale of certain specified commodities through a metal exchange on a cost plus profit basis
 
*commodity muarabah a panacea what is commodity murabaha commodity murabaha as it is generally known is sale of certain specified commodities through a metal exchange on a cost plus profit basis
  
*million sukuk by houston texas based east cameron partners ecp  first ever shariah compliant gas backed securitization  ecp gas reserves are in shallow waters off the coast of louisiana  bsec is the arranger merrill lynch the book runner  a two tier structure  a purchaser spv in delaware to acquire the assets  an issuer spv in cayman islands to issue the sukuk use the proceeds to invest in the purchaser spv by way of a shariah compliant funding agreement  this deal claimed bsec also has two other firsts  first ever islamic securitization rated by s p  first securitization embedding shariah compliant hedges
+
*million sukuk by houston texas based east cameron partners ecp first ever shariah compliant gas backed securitization ecp gas reserves are in shallow waters off the coast of louisiana bsec is the arranger merrill lynch the book runner a two tier structure a purchaser spv in delaware to acquire the assets an issuer spv in cayman islands to issue the sukuk use the proceeds to invest in the purchaser spv by way of a shariah compliant funding agreement this deal claimed bsec also has two other firsts first ever islamic securitization rated by s p first securitization embedding shariah compliant hedges
*german state sukuk a pleasant surprise  m year sukuk issued by state of saxony anhalt  saxony anhalt a new state of germany after reunification  state debts are guaranteed by federation of germany  rating of aaa by fitch and aaby standard poor s  citigroup lead manager kfh co lead manager  approval form citi islamic bank shari ah board  underlying buildings owned by ministry of finance  sale leaseback structure  spv registered in netherlands  a variable rent euribor  listed at luxembourg exchange  reason to choose sukuk  broaden the investor basis  access to different funding sources  promote the location sukuk in us 
+
*german state sukuk a pleasant surprise m year sukuk issued by state of saxony anhalt saxony anhalt a new state of germany after reunification state debts are guaranteed by federation of germany rating of aaa by fitch and aaby standard poor s citigroup lead manager kfh co lead manager approval form citi islamic bank shari ah board underlying buildings owned by ministry of finance sale leaseback structure spv registered in netherlands a variable rent euribor listed at luxembourg exchange reason to choose sukuk broaden the investor basis access to different funding sources promote the location sukuk in us
  
*malaysian khazanah sukuk  million issued in oct by khazanah a finance ministry sub  arranged by cimb hsbc ubs  khazanah owns a percent stake in telekom malaysia national telecom utility percent set aside for this transaction  sukuk represent interests in a trust constituted by the issuer are exchangeable into shares of telekom malaysia  world s first exchangeable effectively equity linked sukuk  sukuk pays an coupon of
+
*malaysian khazanah sukuk million issued in oct by khazanah a finance ministry sub arranged by cimb hsbc ubs khazanah owns a percent stake in telekom malaysia national telecom utility percent set aside for this transaction sukuk represent interests in a trust constituted by the issuer are exchangeable into shares of telekom malaysia world s first exchangeable effectively equity linked sukuk sukuk pays an coupon of
* order book was oversubscribed times  shariah acceptance outside malaysia dj citi sukuk index  first global sukuk index  criteria  issue size of million  minimum maturity of one year  minimum rating of bbb baa by leading rating agencies  index at the onset was tracking only seven sukuk
+
*order book was oversubscribed times shariah acceptance outside malaysia dj citi sukuk index first global sukuk index criteria issue size of million minimum maturity of one year minimum rating of bbb baa by leading rating agencies index at the onset was tracking only seven sukuk
  
*malaysian sukuk controversy  lmc dj city index excludes most malaysian corporate sukuks  this is primarily due to islamic private debt securities ipds based on sale of receivables  issues backed by sale of so called debt are frowned upon by scholars in gulf pakistan but malaysian scholars have okayed them  the malaysian ipds market is by far the largest islamic corporate issuances market  at the beginning of outstanding ipds issues in the market totaled just under rm billion
+
*malaysian sukuk controversy lmc dj city index excludes most malaysian corporate sukuks this is primarily due to islamic private debt securities ipds based on sale of receivables issues backed by sale of so called debt are frowned upon by scholars in gulf pakistan but malaysian scholars have okayed them the malaysian ipds market is by far the largest islamic corporate issuances market at the beginning of outstanding ipds issues in the market totaled just under rm billion
*no imitation of conventional  no default truly hard asset backed it can get sick but will never die  sukuk market is growing fast  most issues are over subscribed setting new records  oil revenues b in gcc in demand is mounting  successful issues listing rating in international markets us uk germany etc ksa pakistan now in the game  dubai ports customs fz convertible musharaka sukuk of
+
*no imitation of conventional no default truly hard asset backed it can get sick but will never die sukuk market is growing fast most issues are over subscribed setting new records oil revenues b in gcc in demand is mounting successful issues listing rating in international markets us uk germany etc ksa pakistan now in the game dubai ports customs fz convertible musharaka sukuk of
  
*sukuk revisited  instrumental for increasing width breadth of ifi offerings  higher development costs but it could be rewarding in l
+
*sukuk revisited instrumental for increasing width breadth of ifi offerings higher development costs but it could be rewarding in l
  
* ownership certificates sukuks are easily transferable  price guarantee based on property purchase agreement  all cash flows are known in advance to avoid gharar  there are some though minimal risks  separate legal entity units holders of the trust a
+
*ownership certificates sukuks are easily transferable price guarantee based on property purchase agreement all cash flows are known in advance to avoid gharar there are some though minimal risks separate legal entity units holders of the trust a
  
*e investors to re  interbank secondary market tradability  highly rated standardized instrument  real estate backing cash flows to reduce risks  re its cfs to satisfy scholars strict requirements  stability strengths of re to offset s
+
*e investors to re interbank secondary market tradability highly rated standardized instrument real estate backing cash flows to reduce risks re its cfs to satisfy scholars strict requirements stability strengths of re to offset s
  
*remms R phase b regular operations  finance spv will lease the properties to operating spv at money market rate  operating spv will sub lease property to a quality top rated tenants  sub lease payments to cover primary lease payment spread  difference in sub lease income and primary lease costs spread will accrue as an operating surplus in operating spv  finance spv regularly collects rents and distributes to sukuk holders
+
*remms R phase b regular operations finance spv will lease the properties to operating spv at money market rate operating spv will sub lease property to a quality top rated tenants sub lease payments to cover primary lease payment spread difference in sub lease income and primary lease costs spread will accrue as an operating surplus in operating spv finance spv regularly collects rents and distributes to sukuk holders
*remms R phase a acquisition  re advisor identifies proposes a property for acquisition  sponsors commit to purchase advisor finalizes due diligence  modalities of leasing structure established  closing formalities are completed in the name of newly established spv
+
*remms R phase a acquisition re advisor identifies proposes a property for acquisition sponsors commit to purchase advisor finalizes due diligence modalities of leasing structure established closing formalities are completed in the name of newly established spv
  
* in case of losses born by funds provider only  musharaka sukuk  similar to the mudaraba  both parties provide financing to the projects  in case of losses both parties will lose proportionate to capital
+
*in case of losses born by funds provider only musharaka sukuk similar to the mudaraba both parties provide financing to the projects in case of losses both parties will lose proportionate to capital
  
*types of sukuk salam sukuk  a sale seller undertakes to supply a commodity to buyer at a future date in return for an advanced price paid in full on the spot  price is in cash but the supply of the good is deferred  as a form of financing the purchaser is able to acquire assets by advance payment at a discounted price subsequently sells upon delivery  salam sukuk a type of a forward contract forbidden under shariah law unless there are strict conditions to eliminate uncertainty  it differs from istisna a sukuk in that the purchase price for assets must paid in full delivery date must be fixed
+
*types of sukuk salam sukuk a sale seller undertakes to supply a commodity to buyer at a future date in return for an advanced price paid in full on the spot price is in cash but the supply of the good is deferred as a form of financing the purchaser is able to acquire assets by advance payment at a discounted price subsequently sells upon delivery salam sukuk a type of a forward contract forbidden under shariah law unless there are strict conditions to eliminate uncertainty it differs from istisna a sukuk in that the purchase price for assets must paid in full delivery date must be fixed
*debt can t be traded according to islamic law  aaoifi issued standards for different sukuk types  other types sukuk al wakala sukuk al muzra a sukuk al musaqa sukuk al muqarasa sukuk ijara mowsufa bithimn sukuk manfaa ijara sukuk manfaa ijara mowsufa bithimn and sukuk milkiyat al khadamat
+
*debt can t be traded according to islamic law aaoifi issued standards for different sukuk types other types sukuk al wakala sukuk al muzra a sukuk al musaqa sukuk al muqarasa sukuk ijara mowsufa bithimn sukuk manfaa ijara sukuk manfaa ijara mowsufa bithimn and sukuk milkiyat al khadamat
  
  
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[http://45.40.136.134/~hodhood/HodHoodDocuments/IslamicFinance/SukukIslamic/Islamic%20Interbank%20Market%20&%20Sukuk%20by%20Masood%20Ajazi.pdf Read the Full Document]
+
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Latest revision as of 07:23, 11 November 2017


Top 20 FREQUENT WORDS

sukuk 107 islamic 37 liquidity 32 risk 26 risks 24 spv 22 assets 21 price 17 interbank 16 issues 16 remms 16 murabaha 15 financial 14 cash 13 commodity 13 corporate 12 credit 12 libor 12 operating 12 banks 11 estate 11 finance 11 holders 11 sukuks 11


DOCUMENT KEY POINTS

  • islamic interbank market sukuk sukuk issuance a corporate fi s fi s their role in the islamic interinter bank market by masood aijazi cfa please read the disclaimer on page disclaimer this presentation represents the views of masood aijazi cfa not his employer national commercial bank ncb nor the conference organizer international islamic financial markets iifm ncb or iifm in any way shape or form are not responsible for contents of this presentation
  • any other use without proper permission is not allowed
  • corporate bonds � financial derivatives � options � swaps � future � repos � interbank markets � lender of last resort liquidity risk � investment firm firm s definition liquidity risk includes both � the risk of being unable to fund its portfolio of assets at appropriate maturities and rates and � the risk of being unable to liquidate a position in a timely manner at reasonable prices
  • � regulators definition � risk to a bank s earnings and capital arising from its inability to timely meet obligations when they come due without incurring unacceptable losses
  • billion were found to be in liquid assets � underutilization of financial resources � lower income and higher cost � loss of competitiveness
  • of participants no lender slow of last development resort in islamic key issues in financial liquidity instruments different shari a management interpretation absence of no islamic interislamic secondary bank market market credit for this diagram iifm
  • islamic banks assets portfolio murabahah musharakah mudarabah ijara murabaha others source iqbal munawar ausaf ahmad tariqullah khan challenges facing islamic banking jeddah irti key issues in liquidity management small no
  • m in ifis � investments long dated a deposits are short � massive gap asset liability mismatch � massive liquidity problem � can not borrow when there are withdrawals � excess liquidity � overwhelming use of muarabaha � sukuks oversubscribed no secondary market � shortage of instruments � lack of liquidity ironically increases demand for liquidity � liquidity vehicles cannot withstand a m injection or withdrawal � malaysia is an exception where islamic interbank market do exits believe it not
  • lm in ifis � commodity murabaha � commodity murabaha � commodity murabaha � commodity murabaha � deposit management � sukuk � infrastructure institutions � liquidity management center � iifm challenges of l
  • the customer then sells the commodities to a third party on spot basis and gets instant cash source hsbc amanah faq how commodity murabaha works sell at a profit deferred payment buy broker conventional broker a b bank a a pay spot agent receive sales proceeds at maturity receive funds from investor to pay broker a a settle investor sales proceeds less agents fees islamic bank investor funds flow principal commodity flow credit for the diagram iifm
  • commodity muarabah a panacea what is commodity murabaha commodity murabaha as it is generally known is sale of certain specified commodities through a metal exchange on a cost plus profit basis
  • million sukuk by houston texas based east cameron partners ecp � first ever shariah compliant gas backed securitization � ecp gas reserves are in shallow waters off the coast of louisiana � bsec is the arranger merrill lynch the book runner � a two tier structure � a purchaser spv in delaware to acquire the assets � an issuer spv in cayman islands to issue the sukuk use the proceeds to invest in the purchaser spv by way of a shariah compliant funding agreement � this deal claimed bsec also has two other firsts � first ever islamic securitization rated by s p � first securitization embedding shariah compliant hedges
  • german state sukuk a pleasant surprise � m year sukuk issued by state of saxony anhalt � saxony anhalt a new state of germany after reunification � state debts are guaranteed by federation of germany � rating of aaa by fitch and aaby standard poor s � citigroup lead manager kfh co lead manager � approval form citi islamic bank shari ah board � underlying buildings owned by ministry of finance � sale leaseback structure � spv registered in netherlands � a variable rent euribor � listed at luxembourg exchange � reason to choose sukuk � broaden the investor basis � access to different funding sources � promote the location sukuk in us �
  • malaysian khazanah sukuk � million issued in oct by khazanah a finance ministry sub � arranged by cimb hsbc ubs � khazanah owns a percent stake in telekom malaysia national telecom utility percent set aside for this transaction � sukuk represent interests in a trust constituted by the issuer are exchangeable into shares of telekom malaysia � world s first exchangeable effectively equity linked sukuk � sukuk pays an coupon of
  • � order book was oversubscribed times � shariah acceptance outside malaysia dj citi sukuk index � first global sukuk index � criteria � issue size of million � minimum maturity of one year � minimum rating of bbb baa by leading rating agencies � index at the onset was tracking only seven sukuk
  • malaysian sukuk controversy � lmc dj city index excludes most malaysian corporate sukuks � this is primarily due to islamic private debt securities ipds based on sale of receivables � issues backed by sale of so called debt are frowned upon by scholars in gulf pakistan but malaysian scholars have okayed them � the malaysian ipds market is by far the largest islamic corporate issuances market � at the beginning of outstanding ipds issues in the market totaled just under rm billion
  • no imitation of conventional � no default truly hard asset backed it can get sick but will never die � sukuk market is growing fast � most issues are over subscribed setting new records � oil revenues b in gcc in demand is mounting � successful issues listing rating in international markets us uk germany etc ksa pakistan now in the game � dubai ports customs fz convertible musharaka sukuk of
  • sukuk revisited � instrumental for increasing width breadth of ifi offerings � higher development costs but it could be rewarding in l
  • � ownership certificates sukuks are easily transferable � price guarantee based on property purchase agreement � all cash flows are known in advance to avoid gharar � there are some though minimal risks � separate legal entity units holders of the trust a
  • e investors to re � interbank secondary market tradability � highly rated standardized instrument � real estate backing cash flows to reduce risks � re its cfs to satisfy scholars strict requirements � stability strengths of re to offset s
  • remms R phase b regular operations � finance spv will lease the properties to operating spv at money market rate � operating spv will sub lease property to a quality top rated tenants � sub lease payments to cover primary lease payment spread � difference in sub lease income and primary lease costs spread will accrue as an operating surplus in operating spv � finance spv regularly collects rents and distributes to sukuk holders
  • remms R phase a acquisition � re advisor identifies proposes a property for acquisition � sponsors commit to purchase advisor finalizes due diligence � modalities of leasing structure established � closing formalities are completed in the name of newly established spv
  • � in case of losses born by funds provider only � musharaka sukuk � similar to the mudaraba � both parties provide financing to the projects � in case of losses both parties will lose proportionate to capital
  • types of sukuk salam sukuk � a sale seller undertakes to supply a commodity to buyer at a future date in return for an advanced price paid in full on the spot � price is in cash but the supply of the good is deferred � as a form of financing the purchaser is able to acquire assets by advance payment at a discounted price subsequently sells upon delivery � salam sukuk a type of a forward contract forbidden under shariah law unless there are strict conditions to eliminate uncertainty � it differs from istisna a sukuk in that the purchase price for assets must paid in full delivery date must be fixed
  • debt can t be traded according to islamic law � aaoifi issued standards for different sukuk types � other types sukuk al wakala sukuk al muzra a sukuk al musaqa sukuk al muqarasa sukuk ijara mowsufa bithimn sukuk manfaa ijara sukuk manfaa ijara mowsufa bithimn and sukuk milkiyat al khadamat


Please note, This is an auto generated summary based on sentances position in the document and other factors

DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\sukuk islamic


KeyWords

sukuk islam asset finance issu certifi financi contract bankable bond ijarah leas structur profit holder rate developed purchase risk investor


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DOCUMENT REFERENCES

Number of Pages

29


Published Date

2007-01-31 16:42:07


Full Document

Read the Full Document