WEEKLY BRIEFING Issue 38 | Sunday, June 30, 2013

FEATURE

Dubai sukuk and bond yields spikes: more than meets the eye By Blake Goud / IFG

PORTLAND | Sat, Jun 29

`

Developed market bond funds do invest in sukuk, but they are

primarily invested much more in emerging market conventional

bonds, so the flows into emerging market fixed income is more

likely to flow to conventional bonds, not sukuk. More of the

investors in sukuk, even international sukuk, come from regional

sharia-sensitive investors that tend to hold them until maturity.

- Continued on Page 4 & 5

INSIDE THIS ISSUE Focus session with IIFM CEO on unrestricted master wakala agreement .................................................................................... 3 Dubai sukuk and bond yields spikes: more than meets the eye .. 4

Oman's first sukuk gets regulatory approval -lead ........................ 7

MIDEAST DEBT-Sukuk-backed sukuk test industry's appetite for

complexity .................................................................................... 8

Anti-Mursi protests to weigh on Egypt bourse .......................... 10

FOREX-Dollar rises on talk of cutback in Fed easing by

September .............................................................................. 11

In turbulent times, frontier stocks hold on to long-haul investors 12

ICAP executive seen linked to LIBOR scandal - Wall Street

Journal ....................................................................................... 13

Source: Thomson Reuters EIKON - Indices Guide <Indices>

This week yields rose dramatically for both Dubai‘s bonds and sukuk

by the largest amount since the Dubai debt crisis even as the UAE

was upgraded to Emerging Market status by index compiler MSCI.

The move in sukuk was less dramatic than in bonds, with yields

rising 22.5 basis points (bps) compared with a 31.1 bps increase for

bonds, with some commentators considering the lower rise in sukuk

yields as support to the idea that sukuk markets are more resilient.

However, there are other factors that belie this explanation and

under different conditions, sukuk yields could move more rapidly

than conventional bonds.

Emerging markets have seen significant inflows in recent years as

yields remain low in developed markets as their central banks

continue to hold rates low to try and boost their slow recovery from

the Great Recession.

100

103

105

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100

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May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13

Global Sukuk and Bond Indices

DJ Sukuk Index

Thomson Reuters Global Sukuk Index

0.4

0.6

0.8

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May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13

IIBR Vs. LIBOR, (USD 6 month)

6 Month USD IIBR 6 Month USD LIBOR

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING

2

NEWS WRAP UP HSBC considers quitting Iraq by selling Dar Es Salaam bank

stake - RTRS

New emir: Qatar will pursue its "independent behaviour" - RTRS

Zain Saudi extends $2.4 bln loan until July 31 –statement -

RTRS

Dubai developer Nakheel in talks to refinance $2.2 bln loan -

RTRS

Mauritius‘ Weston Capital Expresses Interest To Buy Bank

Mutiara - Ventures Africa

Basel presses ahead with plans to limit bank borrowing -

Financial Times (registration)

DP World increases Dubai port capacity - Zawya

Workers in emerging economies most concerned how

companies behave - RTRS

Qatar's emir hands power to son in rare Gulf abdication - RTRS

Egypt debt insurance costs hit record highs-Markit - RTRS*

Bright spots lurk among Asia's submerging markets - RTRS

Islamic finance lobby plans regional network - RTRS

In turbulent times, frontier stocks hold on to long-haul investors -

RTRS

Indonesia IPO train derails as investors hit the exits - RTRS

Singapore, Malaysia face economic hit from prolonged smog -

RTRS

RPT-INVESTMENT FOCUS-Golden ratings era ending for

emerging markets - RTRS

Qatar readies new leadership, little policy change expected -

RTRS

Saudi Alhokair units sign $1.2 bln financing for real estate deals

- RTRS

Arbitration in Malaysia: Taking it to the next level - The Star

ACWA expects to keep Saudi power plant project after fuel

change - RTRS

UPDATE 1-Dubai's Arabtec extends $650 mln share offer period

ARTC.DU - RTRS

MIDEAST DEBT-Bahrain between rock and hard place in bond

decision - RTRS

UPDATE 1-Dubai Group sells credit card firm to First Gulf Bank

- RTRS

Central banks told to head for exit - Financial Times

(registration)

Watch List TEXT-Qatari emir's abdication speech - RTRS

StanChart banker Nelson to take helm at Dubai's ENBD - RTRS

Moody‘s affirms A3 of EXIM Bank of Malaysia, raises baseline

credit assessment to ba3 - Moody‘s

RAM reaffirms AAA rating of SI Capital's Islamic debt issue -

RAM Ratings

Malaysia RAM reaffirms AA3 rating of Prai Power's bonds -

RAM Ratings

Moody's: Malaysia's sovereign rating stable but debt levels

rising - The Star

Indonesia c.bank sees economy growing 6.4-6.8 pct in 2014 -

RTRS

Saudi changes working week to Sun-Thurs - official statement -

RTRS

Citigroup to open representative office in Iraq - RTRS

Alizz Islamic Bank appoints Mohammed Al Fahim Deputy

Chairman - Press Release - Zawya

BisB appoints Abdul Razak Al-Qassim as Board Chairman -

AME Info

*This service is only available to EIKON users, click here to register

CALENDAR OF EVENTS

WEDNESDAY, JULY 3 - 4

MALAYSIA - IFSB - INCEIF Executive Forum on Corporate

Governance of Islamic Banks

TUESDAY, AUGUST 27

PAKISTAN - IFN Roadshow 2013 Pakistan

THURSDAY, AUGUST 29

SRI LANKA - IFN Roadshow 2013 Sri Lanka

FRIDAY, AUGUST 30 - 31

CANADA - The First Annual Conference of Islamic Economics &

Islamic Finance

TUESDAY, SEPTEMBER 3

TURKEY - IFN Roadshow 2013 Turkey

The logo of HSBC bank is seen at its office in the Canary Wharf business district of

London April 1, 2013. HSBC Holdings said last Tuesday it is considering selling its

majority stake in Dar Es Salaam Investment Bank, which has made it the main

international lender in Iraq. REUTERS/Chris Helgren

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING

3

Contact details

IFG Briefing Analyst Team

Ameena Al Haddad

Ammar Radhi

Karim Arafa

Redha Al Ansari

Shaima Hasan

Yusuf Radhi

Emmy Abdul Alim (Editor)

Community Specialist Team

Blake Goud (Community Leader) Duaa Al Masqati Noor Khamdan

Telephone

+973 1750 2020

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IFG Analyst Team

IFG community held a focus session this week to discuss the new IIFM Inter-Bank Unrestricted

Master Investment Wakalah Agreement with Ijlal Ahmed Alvi, CEO of International Islamic Financial

Market (IIFM). The standardized Master Agreement which is prepared ‗On-Balance Sheet‘ basis

provides an alternative to the oft-criticized but widely used commodity murabaha contract for Islamic

inter-bank money markets. The Master Agreement is supplemented with an Operational Guidance

Memorandum which explains how the agreement can be used, giving comprehensive

recommendations. Clauses in the agreement are obligations while recommendations in the

Operational Guidance Memorandum are not contractual obligations.

There is flexibility enough for institutions to adapt this agreement as needed. Any institution intending

to use or adopt the agreement as it is would first need to send a request letter to IIFM, which would

then issue a letter of approval. The institution is then free to use the IIFM sharia pronouncement. But if

an institution decides to adopt the agreement with amendements, the institution would need to

highlight any changes in the request letter to IIFM. Approval will be given if changes are not contrary

to sharia principles and the institution will then be able to use the IIFM sharia pronouncement.

As wakala transactions stand now in common practice, there are questions about the

interchangeability with commodity murabaha in terms of differential treatment of security of principal

and profit under a wakala. In contrast to a murabaha, which provides a guarantee to the degree that

the purchasing institution is obligated to pay cost plus profit on a deferred basis, in a wakala

arrangement neither the Muwakkil‘s (bank providing financing) principal nor profit can be guaranteed

by the Wakil (bank receiving financing). In response, many institutions have shied away from wakala

transactions opting instead for commodity murabaha. Alternatively, institutions are using restricted

wakala where the funds placed under the wakala agreement are invested in murabaha transactions,

something Alvi said the master agreement would replace. The IIFM wakala agreement, which can

allow for commingling with the bank‘s other funds (e.g. customer deposits) or segregated investment,

provides ways in which the risk to principal is limited and where the bank providing financing can be

more confident in receiving the indicative profit in a way that is sharia-compliant.

For example, if the wakil knows that the profits will be below the indicative rate, notice must be

provided to the Muwakkil, in this case it is up to the Muwakkil‘s discretion to continue in the

transaction or to abort it. If he decided to continue then in this case only the actual profit achieved

should be paid by the Wakil, even if it is below the indicative profit. This opens up a way for the Wakil

to pay the indicative profit even if actual profits fall short in a sharia-compliant fashion since the

indicative profit is not legally guaranteed. In practice, most solvent institutions will make the indicative

profit payments in order to continue their ability to access the inter-bank market and avoid questions

about the quality of their management of the funds placed with them under wakala. Hence, there is a

sharia ruling suggesting that where there is such a dispute, the Wakil should bear the burden of proof

to demonstrate that the funds were invested properly.

While the IIFM master agreement aims to provide more clarity there remain some unresolved

questions that each institution and regulator will have to consider about the accounting treatment of

on-balance-sheet wakala transactions, which are not specifically addressed in existing Accounting

and Auditing Organization for Islamic Financial Institutions (AAOIFI) guidance. Alvi deferred in

response to a question and said accounting and regulatory treatment of these wakala transactions

would be left up to AAOIFI and regulators to determine.

In order for the unrestricted wakala to be useful to financial institutions, additional safeguards such as

revised profit clause etc are included that make the Wakil responsible in more situations other than

negligence for a failure to perform under the wakala agreement. It also provides greater transparency

requirements to allow banks providing financing to ensure that they are aware of and comfortable with

the potential risk to both principal and profit under the IIFM‘s wakala master agreement.

COMMUNITY Focus session with IIFM CEO on unrestricted master wakala agreement By Blake Goud / IFG PORTLAND | Fri, Jun 28

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ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING

4

FEATURE Dubai sukuk and bond yields spikes: more than meets the eye

PORTLAND | Sat, Jun 29 By Blake Goud / IFG

- Continued from Page 1 –

The impact of UAE‘s upgrade to Emerging Market status, which will

not take effect until next May, comes from investors not restricted by

the classification, anticipating future flows into these asset classes

based on speculation of events that will change the allocation by

institutional investors tied to benchmarks. With the rumors swirling

that MSCI was going to upgrade Qatar and the United Arab Emirates

to Emerging Market status (which they eventually did), many

investors likely bought the debt securities they anticipated would

benefit most from the buying that emerging market funds would have

to do to move in line with the benchmark change.

Note: Data are an average for two bonds (Qatar Telecom 21 and Qatar National

Bank 17s) and two sukuk (ADIB Tier 1, DIB Tier 1).

As with many events, this led to a ‗buy the rumor and sell the news‘,

which was coupled by perceived changes in the Federal Reserve‘s

plan to ‗taper‘ its US Government and Agency bond purchases,

leading to a dramatic fall in price (which moves inversely with yields).

As Mashreq Capital DIFC Ltd‘s Abdul Kadir Hussain is quoted: ―A lot

of the sukuk is sitting in hold-to-maturity accounts‖. Chart 1 shows

the different allocation of bonds and sukuk by investor type with

banks and insurance companies (typically buy and hold investors)

taking a larger share of sukuk than bonds while the reverse is true for

funds, which are more active in secondary markets.

In addition to the types of investors buying bonds compared with

sukuk, there is a greater share of regional investors from the Middle

East buying sukuk compared with bonds. This will also tend to lower

the trading activity in sukuk since many regional investors are hold-

to-maturity (in part because of a shortage of supply relative to

demand of sukuk, making replacement of a sold sukuk more difficult

than bonds).

Note: Data are an average for two bonds (Qatar Telecom 21 and Qatar National

Bank 17s) and two sukuk (ADIB Tier 1, DIB Tier 1).

While the fund flows from global institutional investors as well as

shifts in risk appetite driven by central bank policies are the primary

driving force for emerging market bonds like Dubai‘s, lower liquidity

in sukuk markets discourages the type of arbitrage trading that would

be expected to decrease the shifts in the relative yields of

conventional bonds and sukuk because sukuk are structured to

mirror as much as possible the risk and return profile of conventional

bonds.

0%

10%

20%

30%

40%

50%

60%

70%

80%

Banks Funds Pension &

Insurance

Other

Chart 1: Investors by Type - 2 Qatar bonds and 2 UAE sukuk

Sukuk Bond

0%

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20%

30%

40%

50%

60%

Middle East Asia Europe & US

Chart 2: Investors by Region

Sukuk Bond

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING

5

Source: Thomson Reuters EIKON Data and IFG Analysis. Spreads are calculated as yield on sukuk (Dubai minus yield on bonds.Sukuk are Dubai 4.051% 16s and DubaI

6.45% 22s. Bonds are Dubai 4% 14s and Dubai 7.75% 20s.

However, as Chart 3 shows, yield differences persist for similar

bonds and sukuk (using the most similar Dubai sovereign sukuk and

bonds with original tenors of 5- and 10-year at issue). Another

related possibility is that investors in sukuk are demanding a greater

liquidity premium relative to bonds. Both explanations provide further

reason for greater development of secondary market liquidity in

sukuk markets, which is likely to progress slowly as long as there

remains excess demand for sukuk relative to supply.

Chart 3 shows the spread of sukuk over conventional bonds for

Dubai (5- and 10-year spreads). The yield spread for sukuk relative

to bonds rose from the summer of 2012 until the end of 2012 and

remained elevated where common expectation given liquid markets

would be for funds to shift from bonds to sukuk to capture higher

yield for similar securities. One possible explanation for why yields in

bonds dropped faster than sukuk is that they attract greater interest

from Western asset managers who are unfamiliar with sukuk, and

hence when adding exposure to Dubai gravitate more towards

bonds.

As expectations for an upgrade of these markets to emerging market

status rose, investors wanting to move ahead of the funds also chose

to invest in bonds rather than sukuk, keeping the yield spread

elevated even amidst strong demand for sukuk—particularly

sovereign sukuk.

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May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13

Spreads (Sukuk - Bond) Spreads (Sukuk - Bond)

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING 6

SUKUK REVIEW Sukuk Market Overview

Malaysia has sold 4.0 billion ringgit ($1.3

billion) in Islamic government bonds

maturing in 2020 at an average yield of

3.745 percent, the central bank said on

Thursday. The bid-to-cover ratio was 1.90

times. RTRS* Thu, 27 Jun

RAM Ratings has reaffirmed the respective

AAA, AA1, AA2, and AA3 ratings of Axis

REIT Sukuk Berhad’s (―ARSB‖ or ―the

Issuer‖) RM110 million Class A to Class D

Sukuk under its First Sukuk Issue

(collectively referred to as, ―the First

Sukuk‖); all the ratings have a stable

outlook. ARSB is a special-purpose vehicle

set up by Axis Real Estate Investment Trust

(―Axis REIT‖) as a funding conduit for its 15

year Islamic Medium-Term Notes

Programme of up to RM300 million (―Sukuk

Programme‖). Supported by a portfolio of 3

industrial and industrial-office mixed

properties and 1 retail property (―the

Properties‖), the First Sukuk represents the

initial issuance under the Sukuk Programme

using the Islamic principle of Murabahah.

RAM Wed, 26 Jun

MARC has assigned a final rating of AA+IS

to Kapar Energy Ventures Sdn Bhd’s

(KEV) RM2.0 billion Sukuk Ijarah (Sukuk)

with a stable outlook. Upon review of the

final documentation of the forthcoming

Sukuk issuance, MARC is satisfied that the

terms and conditions of the Sukuk have not

changed in any material way from the draft

documents on which the earlier preliminary

rating of AA+IS was based. Full details on

the assigned rating have been provided in

KEV‘s preliminary rating announcement on

June 19, 2013. MARC Wed, 26 Jun

Cocoa-producing Osun State plans to

issue Nigeria's first sukuk bond, starting with

10 billion naira ($62 million), before the end

of July, a banking source close to the deal

told Reuters on Tuesday. The planned 7-

year paper would be the first sukuk bond to

be issued in Africa's second-biggest

economy and is part of a 60 billion naira

debt raising programme by Osun State,

which started last year, the banking source

told Reuters. The funds will be used to

finance the construction of education

projects, the source said. Nigeria is home to

the largest Muslim population in sub-

Saharan Africa, with around half of its 160

million people members of the Islamic faith.

It is also home to one of Africa's fastest

growing consumer and corporate banking

sectors. The Osun bond will be issued

through a book-building process which will

earn a return for sukuk holders via a semi-

annually paid rent structure called the Ijara,

the source said, targeting local pension

funds and international investors on the

bond. Local credit rating agency Agusto &

Co has assigned an A rating to the note

which will be listed on the Nigerian Stock

Exchange, said the banking source, adding

that Osun was waiting for Securities and

Exchange Commission (SEC) approval to

start marketing the bond. In March, Nigeria‘s

SEC approved new rules allowing firms to

issue Islamic bonds, a move aimed at

attracting Middle Eastern investors. RTRS

Tue, 25 Jun

Morocco has won backing from the Saudi-

based Islamic Development Bank for its first

sukuk as the cash-strapped North African

country looks to attract Middle Eastern

investors. ―The Islamic Development Bank

has proposed us to buy our sukuk rather

than offering us another loan,‖ General

Affairs minister Mohamed Najib Boulif said.

―But the amount has not been set yet".

Morocco's moderate Islamist Justice and

Development Party, which came to power in

2011 after protests prompted by the Arab

Spring, has paved the way for Islamic

finance by reforming its securitisation law to

allow sukuk. Earlier this year, the Morocco

agreed a $2.4 billion package with the IDB,

under which it will receive $600 million each

year from 2013 to 2016. It also raised $750

million last month in a two-part reopening of

its $1.5 billion bond. The North African

country is considering other financial

reforms, such as that of the pension and tax

systems, as it grapples with the fall out from

the euro zone crisis and the Arab Spring

protests. It will also deregulate prices for

some basic goods in the next two weeks, its

first step towards reducing subsidies, the

minister said in an interview last week. He

stressed, however, that the timing has not

been decided. RTRS* Mon, 24 Jun

Source: Thomson Reuters EIKON CDS <REUTERSCDS>

*This service is only available to EIKON users, click here to

register

Credit Default Swaps

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May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13

Bahrain Egypt Dubai Indonesia

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Saudi Qatar Malaysia Abu Dhabi

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING

7

Oman's first corporate sukuk has received regulatory approval and

the five-year, 50 million rial ($130 million) private placement aims to

close next month, its lead arranger said on Wednesday.

The sukuk will be issued by Tilal Development Co and the proceeds

will be used to repay existing debt and expand the Muscat Grand

Mall. If successful, the issue could pave the way for other

companies in the sultanate to sell Islamic bonds.

"We have already done our roadshows and also got some

commitments from pension funds locally," Mohsin Shaik Sehu

Mohamed, head of Islamic finance at Al Madina Investment, told

Reuters.

"Now the target is to close this deal. We are trying our best to close

it in July."

The sukuk, rated BBB+ by Capital Intelligence, will pay a 5 percent

profit rate and use an ijara structure, a common sharia- compliant

leasing arrangement.

Al Madina says it has other Omani sukuk in the pipeline, with one

deal targeted for later this year. "We have two more in the pipeline -

one government-related entity and one family-owned company,"

Mohamed said.

PIPELINE ISSUE

Oman's first sukuk gets regulatory approval -lead

By Bernardo Vizcaino / REUTERS

Wed, Jun 26

INTERNATIONAL SUKUK WEEK TOP GAINERS*

INTERNATIONAL SUKUK WEEK TOP LOSERS*

NAME CURRENCY BID ASK MATURITY

DATE

YIELD TO

MATURITY

LAST WEEK

YIELD YTM

WOW%

WAKALA GLOBAL USD 103.99 104.99 7/6/2016 1.62 1.892 -14

CBB INTL SUKUK USD 103.73 104.23 6/17/2014 2.28 2.612 -13

INDONESIA SY USD 105.00 105.75 4/23/2014 3.09 2.774 -10

FIRST GULF BANK USD 104.11 104.61 8/2/2016 2.40 2.557 -6

FGB SUKUK USD 104.88 105.38 1/18/2017 2.58 2.743 -5

NAME CURRENCY BID ASK MATURITY

DATE

YIELD TO

MATURITY

LAST WEEK

YIELD YTM

WOW%

ANKA A SUKUK AED 103.20 105.80 8/25/2016 9.40 1.418 96

RAK CAPITAL USD 106.00 106.75 7/22/2014 2.20 1.393 58

SIME DARBY GLOB USD 91.14 91.51 1/29/2023 4.42 3.365 32

MEDJOOL USD 91.56 92.56 3/19/2023 6.05 4.664 30

EMAAR SUK USD 109.54 110.29 8/3/2016 5.11 4.018 27

*The top gainers and losers price ranking is driven by the yield to maturity movement on week to week basis

Source: Thomson Reuters EIKON – Sukuk Speed Guide - International Sukuk <0#INTLSUKUK>

This service is only available to EIKON users, click here to register

APPEAL

Tilal Development is 40 percent-owned by sovereign wealth fund

Qatar Investment Authority. Omani domestic investors such as

pension funds and insurance firms have expressed interest in the

sukuk and it could have a broader regional appeal, in particular from

Qatar, Mohamed added.

A corporate sukuk could also be welcomed by local Islamic banks,

which are eager for access to more sharia-compliant investment

products while Oman's Islamic money markets are underdeveloped.

Although the threat of monetary policy tightening in the United

States is dampening issuance in other markets, the Tilal sukuk will

weather that because of its specific client base, Mohamed said.

"What we see is that it will be a private placement and most are

sharia-sensitive investors."

Oman began to introduce Islamic finance last year. The government

has been laying plans to issue a sovereign sukuk, but that issue is

expected to occur next year, according to the latest comments by

officials.

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING

8

ANALYSIS

MIDEAST DEBT-Sukuk-backed sukuk test industry's appetite for complexity

By Bernardo Vizcaino / REUTERS Thu, Jun 27

Packages of long-term sukuk back short-term programmes

Bahrain's LMC running a programme, IILM plans one

Nigerian central bank guidelines cover them

But multiple approvals by sharia boards raise costs, time

IILM programme delayed by regulatory preparations

Interbank lending programmes that securitise sukuk are testing the

Islamic finance industry's ability to digest complex financial products.

Some firms are starting to combine sukuk, using portfolios of long-

term issues to back short-term certificates. This lets them create

liquidity programmes that address a major weakness of the Islamic

finance industry: a persistent shortage of money market instruments

needed by Islamic banks to manage their short-term funds.

Such is the approach used by Liquidity Management Centre (LMC),

a Bahrain-based wholesale Islamic bank.

"The programme is very simple: we have an SPV (special purpose

vehicle) where we book all the sukuk. The SPV is fully backed by

sukuk of different tenors and rates," said Ahmed Abbas, LMC's chief

executive.

The rising number of sukuk issuers globally is making it easier to

manage the programme, and LMC plans to double its size in a

year's time from about $120 million now, Abbas added.

"As we speak, we are reviewing our offering circular. We will have

more options in terms of tenors, rates and liquidity."

He added, "As we see more issuers come to the market, the

programme can grow. This helps in geographical distribution, the

number of issuers - it helps on many levels."

A similar format is to be used by the Malaysia-based International

Islamic Liquidity Management Corp (IILM), which plans to launch a

Luxembourg-domiciled programme of its own. "All of the assets will

be either sovereign, sovereign-linked or supranational assets," said

Eric Gretch, senior director at Standard and Poor's, which rates the

programme.

"Basically you have long-term sukuk assets backing short-term

certificates, all of which will be sharia-compliant."

The IILM programme was originally to launch by the end of this

month; that timetable is now expected to slip because more time is

needed to resolve regulatory aspects, according to a source familiar

with the programme. But the IILM scheme could encourage others

to consider its approach. "We expect other similar programmes to

come to market in attempts to replicate this unique structure,"

Gretch said.

LAYERS

If these programmes gain traction they could open the door to

additional layers of securitisation, not only in Islamic finance's core

markets in the Middle East and Southeast Asia, but perhaps further

afield.

For example, Nigeria is only just starting to develop Islamic finance;

its cocoa-producing Osun State plans to issue the first sukuk in the

country, a 10 billion naira ($62 million), seven-year issue, by the end

of July.

But the Nigerian central bank issued guidelines in December for

asset-backed securities that would use IILM certificates as collateral

- essentially creating three layers of sukuk.

LMC plans to develop a product secured by its own short-term

sukuk programme through a murabaha structure, a common cost-

plus sale transaction, Abbas said.

But the nature of Islamic finance raises potential obstacles to such

complexity. Boards of scholars at the issuing institution must certify

the sharia-compatibility of not only the programme itself, but of all

the sukuk backing it.

Scholars at each investing institution are supposed to do the same

thing - increasing costs and time required with each layer of the

product. Since sharia standards are not uniform across countries

and investing institutions, the issuer may have to take into account

an increasingly complex set of demands as its investor base

expands.

The complexity of ensuring approvals for a range of sovereign sukuk

that will back the IILM's programme appears to be one reason

behind delays to its launch. The IILM was established in 2010 and

took over two years to even agree on a plan for its programme.

Some issuers may seek to minimise the approval problem by

placing their products with a relatively small group of like-minded

institutions, often from the same geographical area.

The LMC programme, launched in 2004, was initially used mainly by

its own shareholders and related parties, although its client base

has expanded since then, Abbas said.

LMC's four shareholders, each with a 25 percent stake, are Bahrain

Islamic Bank BISB.BH, Dubai Islamic Bank, the Jeddah-based

Islamic Development Bank (IDB) and Liquidity Management House,

a unit of Kuwait Finance House.

However, the types of sukuk in which the LMC programme can

invest has gradually expanded and now includes selected Malaysian

and Indonesian issuers, Abbas said.

The IILM has not revealed its choice of sukuk to back its

programme, but recent issuers of sukuk include IILM shareholders

such as the AAA-rated IDB and Qatar's central bank.

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING

9

BOOK RUNNER AMOUNT ISSUED ($MILLION) MARKET SHARE NUMBER OF ISSUES

HSBC Holdings PLC 1,987.50 16.8 7

Standard Chartered PLC 1,182.00 10 8

Deutsche Bank 1,074.60 9.1 2

Emirates NBD PJSC 886 7.5 7

Citi 782.2 6.6 4

National Bank of Abu Dhabi 704.2 6 5

Dubai Islamic Bank Ltd 682.2 5.8 4

RBS 291.7 2.5 2

RHB 278.5 2.4 2

Malayan Banking Bhd 200 1.7 1

Abu Dhabi Commercial Bank Ltd 165.6 1.4 1

Abu Dhabi Islamic Bank (ADIB) 165.6 1.4 1

Natl Comml Bank Saudi Arabia 125 1.1 1

Kuwait Finance House 125 1.1 1

Natixis 125 1.1 1

Al Hilal Islamic Bank 125 1.1 1

CIMB Group Sdn Bhd 125 1.1 1

Credit Agricole CIB 125 1.1 1

Barwa Bank QSC 125 1.1 1

Masraf Al Rayan 74.6 0.6 1

QInvest LLC 74.6 0.6 1

Alkhair Capital Saudi Arabia 74.6 0.6 1

Goldman Sachs 74.6 0.6 1

BNP Paribas 66.7 0.6 1

Nomura 66.7 0.6 1 Industry Total

11,819.00 100 16

Source: Thomson Reuter

SUKUK PIPELINE 2013

Issuer Name Sukuk

Structure Country Status Subsc. Date

Issue Size ($M)

Tenor Arranger/Advisor

Doha Bank Ijarah Qatar Delayed - 1,000 - -

Inverfin Sukuk Berhad Unknown Malaysia Announced - 4.84 - -

Riyad Bank Unknown Saudi

Arabia

Announced - - - -

Bahrain

Telecommunications

Company

Unknown Bahrain Rumoured - - - BNP Paribas,

Citigroup

Ministry of Finance -

Egypt

Musharaka Egypt Announced 2014 2,000 3 Years to

5 Years

National Bank of

Egypt WOM Finance Ijarah Indonesia Announced 2013 30.628 - -

Airport Authority Hong

Kong

Ijarah Hong Kong Rumoured 2013 - - Citigroup Global

Markets Limited

Al-Amanah Islamic

Investment Bank

Ijarah Philippines Rumoured 2013 1,000 5 Years -

Government of Kenya Unknown Kenya Rumoured 2013 500 - -

Islamic Development

Bank

Ijarah Indonesia Rumoured 2013 - - -

First Fidelity Leasing

Modaraba (FFLM)

Musharaka Pakistan Rumoured 2013 2.03 5 Years IGI Investment Bank

Source: Zawya. For complete list of pipeline click here

INTERNATIONAL SUKUK LEAD ARRANGERS LEAGUE TABLE 2013

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING

10

Equities Review MARKETS OVERVIEW

Anti-Mursi protests to weigh on Egypt bourse

By Nadia Saleem / REUTERS DUBAI | Sun, Jun 30

MARKET SNAPSHOT

MEA Value WoW MTD YTD

TASI 7504.38 -0.76% 1.35% 10.34%

DFMGI 2226.79 -3.17% -5.92% 37.24%

ADI 3552.33 -0.34% -0.30% 35.03%

KWSE 7846.17 -2.74% -5.47% 32.22%

XU100 76294.51 4.37% -11.28% -2.45%

EGX30 4685.09 3.54% -13.86% -14.23%

MSI 6354.54 -0.84% -0.99% 10.31%

QSI 9280.27 0.53% 0.46% 11.02%

Global Value WoW MTD YTD

FTSE 100 6215.47 1.62% -5.58% 5.39%

DAX 7959.22 2.18% -4.67% 4.56%

STOXX 50 1035.15 2.08% -6.03% -1.26%

DJIA 14909.60 0.74% -1.36% 13.78%

S&P 500 1606.28 0.87% -1.50% 12.63%

TOPIX 1075.06 3.18% -0.10% 32.09%

HANG SENG 76294.51 4.37% -11.28% -2.45%

NIKKEI 13677.32 3.38% -0.71% 31.57%

Source: Thomson Reuters EIKON - Indices Guide <Indices>

Plans for mass protests against President Mohamed Mursi will

weigh on Egypt's bourse on Sunday, because of fears they could

result in worse violence after several people were killed and

hundreds wounded in the last few days.

The Egyptian index .EGX30, which last closed at 4,685 points, is

already down 14 percent so far this year and late last week

showed tentative signs of bottoming out around 4,500 points, as

exchange data showed signs of modest net buying by foreign

investors.

But the potential for violence - and a further slide by the Egyptian

pound EGP= as a result - may deter most buyers on Sunday.

The political crisis appears to have once again stalled any

progress towards a loan deal between Egypt and the

International Monetary Fund.

When the index broke earlier this month below major support on

the November low of 4,683 points, it triggered a double top

formed by the September and January peaks and pointing down

further in the medium term - there is no major support left before

the June 2012 low of 4,027.

In the United Arab Emirates, Aldar Properties will begin trading

after its merger with Sorouh Real Estate on Sunday. Some

traders think a short-term rise by the stock to mark the merger is

on the cards, especially because of the strong tone in global

equity markets on Friday.

Aldar said it had amended terms on Sorouh's 2.1 billion dirham

($570 million) loan facility by cutting the interest rate to 2.45

percent from 4.5 percent, bringing down the cost of servicing the

debt as its risk declined with the merger - a sign of the concrete

benefits that could arise from the tie-up.

In Qatar, shares in telecommunications operator Ooredoo may

gain after it won a licence to provide telecommunications

services in Myanmar.

But Saudi Arabia's bourse .TASI, starting the week on a Sunday

for the first time since the country's weekend was changed, may

open lower after fresh declines in crude oil prices.

Saudi petrochemical stocks tend to track oil prices; Brent crude

oil futures shed 66 cents a barrel on Friday to settle at $102.16.

Source: Lipper, a Thomson Reuters company

90

110

130

150

170

May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13

Thomson Reuters/ IR Islamic Indices

MENA Global AsiaPac ex Japan

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING 11

FOREIGN EXCHANGE REVIEW FOREX-Dollar rises on talk of cutback in Fed easing by September

By Gertrude Chavez-Dreyfuss / REUTERS

NEW YORK | Fri, Jun 28

The dollar advanced against the yen and the euro on Friday as

investors resumed pricing in the possibility that the Federal Reserve

will begin to pare back its bond-buying program as soon as its

September policy meeting.

Fed Governor Jeremy Stein on Friday highlighted September as a

possible time when the U.S. central bank will need to consider

reducing its 'quantitative easing' economic stimulus progam.

Stein said the Fed's eventual decision to scale back its $85 billion in

monthly asset purchases must be based on the overall economic

progress since it launched the stimulus, and not be "excessively

sensitive" to the most recent economic data.

"Stein's remarks cannot be lightly dismissed and raise risks that

some on the Committee may have already essentially decided on

September," said Michael Feroli, economist at J.P. Morgan in New

York.

"More generally, compared to remarks from Fed officials earlier this

week, Stein's speech was less geared toward calming market

perceptions of Fed policy and did less to question market pricing of

the first rate hike."

J.P. Morgan in the past had said that the first 'taper' from the Fed

would be a close call between September and December. But since

first-quarter U.S. economic growth numbers and potentially second-

quarter figures could show low growth, the U.S. bank said the Fed

could reduce easing in December.

The dollar got an added boost on Friday when a report showed U.S.

consumer sentiment improved in late June, ending the month close

to a near six-year high set in May, as optimism among higher-

income families rose to its strongest in six years, a Thomson

Reuters/University of Michigan survey showed.

The euro was last down 0.2 percent at $1.3015, with the session low

at $1.2990. Against the yen the dollar was up 0.9 percent at 99.20

yen.

Volume in dollar/yen surged to US$4.0 billion as of late afternoon

trading in New York, while turnover in euro/dollar was US$4.3 billion.

For June, the dollar fell 1.2 percent against the yen, snapping eight

straight months of gains against the Japanese currency, while the

euro was little changed against the dollar.

"We are settling into the bottom of the recent range (on euro/dollar)

at around $1.3000," said Andrew Dilz, foreign currency trader at

Tempus Inc in Washington, "but there is no reason not to be trading

at $1.3000."

Richmond Fed President Jeffrey Lacker said from West Virginia on

Friday that financial markets should brace for more volatility as they

digest news that the Fed will scale back bond buying later this year,

but added it was an understandable adjustment and will not derail

growth.

Investors were also beginning to speculate about what

announcements may come from the European Central Bank policy

meeting next Thursday.

Analysts said growing worries about the euro zone's faltering

economy, in contrast to the relative optimism around the U.S.

economy, could hurt the bloc's common currency.

This week ECB President Mario Draghi cited downside risks to

growth and said the bank was nowhere near exiting its

accommodative monetary policy.

"We think President Draghi will use more dovish language in the

statement and during the press conference that will highlight the

growing prospects of further easing measures, including negative

deposit rates," said CitiFX in a research note.

The Bank of England, Reserve Bank of Australia and Sweden's

Riksbank will also hold monetary policy meetings next week.

While the Fed's asset purchases have weighed on the dollar, Song

said investors would take it as a positive sign if the ECB ramped

up efforts to stoke growth in Europe.

"There is a little bit of a different dynamic on the two currencies,"

Song said.

Other analysts cautioned that quarter-end flows were creating

some distortion in market sentiment.

Large funds rebalance their investment portfolios at the end of

each month and quarter, so their flows and requirements to square

positions often dominate trade on the last trading day.

The Australian dollar was last down 0.6 percent against the

Canadian dollar at C$0.9644 and touched a session low of

C$0.9607 after the release of IMF data on central bank holdings,

which for the first time separated reserves in the two commodity

bloc currencies as individual line items.

Central banks held US$98.66 billion in the Australian currency

globally as of the first quarter, or 1.63 percent of allocated

reserves. They held US$94.93 billion in Canadian dollars, or 1.57

percent of known reserves.

European Central Bank (ECB) President Mario Draghi arrives at an European Union

leaders summit in Brussels June 28, 2013. European leaders agreed on new steps to

fight youth unemployment and promote lending to credit-starved small business on

Thursday after deals on banking resolution and the long-term EU budget gave their

summit a much needed lift. REUTERS/Francois Lenoir

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING 12

INVESTMENT FOCUS

In turbulent times, frontier stocks hold on to long-haul investors

By Carolyn Cohn / REUTERS

LONDON | Mon, Jun 24

Hard to enter and hard to leave, frontier stock markets from Bulgaria

to Pakistan have attracted investors who are in for the long haul,

keeping them clear of the worst of the markets storm.

While these less-developed emerging markets suffer from a lack of

liquidity, with buyers and sellers struggling to match up at times, that

can be a bonus when nervous investors are dashing for the exits

elsewhere.

More liquid emerging market stocks have slumped 15 percent since

May 22, when U.S. Federal Reserve Chairman Ben Bernanke

fuelled expectations the Fed will scale back its bond-buying

programme, reducing the appeal of high-yielding assets.

Those stocks plummeted last week after the Fed laid out a timetable

for withdrawing the stimulus, with concern about China's economy

and interbank funding adding further pressure.

Frontier stocks, in contrast, have fallen only 3 percent since May 22,

outperforming even the S&P 500 , although Nigerian stocks fell 6

percent in one week this month when valuations were seen as

overstretched.

Part of the allure for asset managers is that these markets stand to

benefit from growth fuelled by natural resources and young

populations with increasing spending power.

While they may not be easy stocks to trade, investors know that and

accept the risk in view of the long-term rewards.

"Markets do not tend to move. Investors understand this is much

more of a long-term bet," said Philip Poole, head of global strategy

at HSBC Asset Management.

While emerging market stocks are down 16 percent this year,

frontier markets are up more than 10 percent, although they did

underperform last year.

Frontier equity funds have seen buoyant inflows of nearly $3 billion

this year, according to Boston-based fund tracker EPFR - nearly half

of all emerging-plus-frontier fund inflows.

LOOSER LINKS

One advantage of frontier market stocks is that they tend to be less

correlated with both global markets and each another, making them

an attractive diversification play.

The MSCI Pakistan index, for example, has only a 0.55 correlation

with the MSCI Kazakhstan index , according to Datastream, where 1

indicates full correlation.

While larger markets have dropped in the past few weeks, some

frontier markets have climbed. Dubai, Abu Dhabi and Qatar have

gained after MSCI this month upgraded the United Arab Emirates

and Qatar to its flagship emerging market index, against which $1.4

trillion is benchmarked.

Other frontier markets which have performed well this year include

off-index plays like Saudi Arabia and Iraq.

Templeton, which manages $4 billion in frontier market assets,

where many frontier funds only total $100-200 million, has a 12

percent exposure to Saudi Arabia in its frontiers fund.

"If you have a long-term investment horizon of 10 years or more,

you cannot ignore (frontier markets)," said Carlos von Hardenberg,

frontier stocks fund manager at Templeton.

Frontier market fans say their index is more heavily weighted than

the energy-heavy emerging markets index to growth stocks in

consumer goods and financial services, which cater for the rising

middle class in these economies.

Like emerging markets, they are also benefiting from intra-regional

trade.

"There is more trade between frontier markets and emerging

markets than a few years back. They do not have too much debt.

They have freely floating currencies," said Sven Richter, frontier

market fund manager at Renaissance Asset Managers.

But even where liquidity is relatively small and the exit channels

narrow, overpriced stocks can still suffer.

When international consumer names like Nestle Nigeria were

showing overstretched valuations of 35 times earnings or more a

few weeks ago, it was time for the few investors there were to bail

out of Nigeria.

"We do not think fundamentals justify those valuations," said Ronak

Gadhia, equity analyst for sub-Saharan Africa at frontier markets

broker Exotix. "We definitely have a lot more sell than buy

recommendations."

As rising U.S. Treasury yields increase the attraction of U.S. debt,

investors may also be less inclined to battle the liquidity hurdle to

access frontier markets.

Jeff Shen, head of emerging equities at Blackrock, the world's

largest asset manager, told a recent briefing that the fund had found

it hard to invest $200,000 in a day across a range of frontier markets

because of liquidity issues, adding:

"I am not sure (frontier markets) are ready for prime-time investing."

But for those who struggle to get in, there are others who may

struggle to get out, keeping these markets afloat.

"When the market gets itself into a tizz, people tend to sell the stuff

they can sell," said Angus Halkett, emerging markets fund manager

at Stone Harbor.

"When you get a bout of risk-off, this stuff tends to outperform

because it does not trade."

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING 13

INTERBANK MARKETS REVIEW

Thomson Reuters Islamic Interbank Benchmark Rate (IIBR)

The IIBR overnight rate decreased on Sunday to 0.187 from 0.203 and the one week rate to 0.245 from 0.260. The one month rate also

dropped to 0.360 from 0.399, the three months rate decreased to 0.510 from 0.557, the six months rate to 0.712 from 0.803 and the one year

rate to 1.040 from 1.142 since last week.

ICAP executive seen linked to LIBOR scandal - Wall Street Journal By Jed Horowitz / REUTERS

NEW YORK / Thu, Jun 27

A senior executive at British brokerage firm ICAP PLC (IAP.L) knew

that some of the firm's brokers worked with traders at UBS AG

(UBSN.VX) to manipulate benchmark interest rates, according to the

Wall Street Journal, which cited sources familiar with the matter.

The executive, David Casterton, was included in some emails sent in

2007 documenting the discussions, in which UBS agreed to make

quarterly payments to ICAP for help in rigging the London Interbank

Offered Rate, or LIBOR, the paper said on its website on

Wednesday.

A call and email to ICAP spokeswoman Brigitte Trafford were not

immediately returned after business hours. The rate-fixing scandal

has infected many of the world's biggest banks, put in motion new

attempts to set global interest rates and indirectly led to the

departure of several top executives at Barclays PLC (BARC.L) and

UBS.

Casterton, who the paper said is a longtime deputy to ICAP Chief

Executive Michael Spencer and currently head of global broking at

the London-based firm, would nevertheless be one of the most

senior executives affected by the Libor scandal, the Journal said.

An ICAP spokeswoman told the paper that no one at the company

was "aware of any corrupt payment from any source at any time" and

said it would be false and defamatory to suggest otherwise.

*The Islamic Interbank Benchmark Rate (IIBR) is published at 11 am Makkah time (GMT +3) Sunday

. #

The London Interbank Offered Rate (LIBOR) is published at 11 am GMT Friday.

Source: Thomson Reuters EIKON <ISL/MONEY>

Thomson Reuters Islamic Interbank Benchmark Rate- IIBR <IIBRFIX>

0.19 0.25

0.36 0.43 0.51

0.71

0.87

1.04

0.125 0.161 0.195 0.236 0.273

0.413

0.000

0.686

0

0.5

1

1.5

2

ON SW 1M 2M 3M 6M 9M 1Y

Yield Curve: IIBR* and LIBOR

IIBR

LIBOR

0.060 0.170 0.210

0.220

0.290

0.430

0.530

0.530

0.170 0.210

0.220

0.290

0.430 0.530

0.510

0

0.2

0.4

0.6

0.8

1

ON SW 1M 2M 3M 6M 9M 1Y

Yield Curve: Murabaha and Wakala Rates

Wakala

Murabaha

ISLAMIC FINANCE GATEWAY – WEEKLY BRIEFING

A service of Thomson Reuters and Zawya Islamic Finance Gateway

The contents of this briefing are independently compiled by the Thomson Reuters and Zawya Islamic Finance Gateway Service, a business of the Global Growth and Operations Division.

While material is drawn from Reuters News and other sources, Reuters has not participated in the selection of these articles.

The production of the briefing is supported by the Bahrain Economic Development Board (EDB) and Tamkeen (Labour Fund) as part of their initiatives to promote Islamic Finance in

Bahrain.

Privacy Statement: To find out more about how we may collect, use and share your personal information please read our

Privacy statement.

You may instruct us to remove you from the Thomson Reuters Zawya Islamic Finance Gateway by clicking here.

Thomson Reuters, 3 Times Square, New York, NY 10036, USA

14

Global Islamic Indices Last Net Chng WoW Chng MTD Chng YTD Chng Global Indices Last Net Chng WoW Chng MTD Chng YTD Chng

Thomson Reuters/IR Islamic GCC Index 134 -0.56 -2.03% -4.59% 9.04%

Thomson Reuters GCC

183 -0.45 -0.90% -2.42% 15.12% Thomson Reuters/IR Islamic MENA Index 119 -0.51 -1.92% -4.69% 8.24%

Thomson Reuters MENA

122 -0.30 -0.66% -3.06% 12.44% Thomson Reuters/IR Islamic Global Index 168 -0.01 0.79% -2.81% 3.67%

Thomson Reuters Global

69 -77.32 -52.10% -53.81% -50.57% DJ Islamic Market World 3129 0.82 0.82% -3.32% 4.34% DJ INDU AVERAGE 14910 -114.89 0.74% -1.36% 13.78%

DJ Islamic Sustainability 2678 0.00 1.14% -3.39% 3.37%

DJ Sustainability World 80 Price Index 1447 -4.06 2.04% -4.32% 2.09%

MSCI World Daily PR 1035 -0.11 1.42% -2.56% 10.33% MSCI World Price Return 1434 -2.48 0.87% -2.61% 7.10% S&P500 Shariah 1381 -5.92 0.35% -2.02% 10.07% S&P 500 1606 -6.92 0.87% -1.50% 12.63% FTSE4GDB Global 5861 0.00 0.95% -2.94% 5.59% FTSE100 6215 -27.93 1.62% -5.58% 5.39% Emerging Markets Islamic Domestic 905 20.74 3.01% -5.17% -10.88%

DJIM World Emerging Markets 1939 -0.91 3.59% -6.01% -9.80%

DJ Islamic GCC 1826 0.05 -0.76% 0.36% 10.36% Dow Jones GCC 1662 0.05 -0.99% -0.44% 10.59% DJ Islamic Global Finance & Takaful 1126 -0.04 -1.24% -1.87% 7.20%

DJ Global Financials

191 0.11 2.04% -3.93% 5.63%

Thomson Reuters /IR Islamic Indices Last Net Chng WoW Chng MTD Chng YTD Chng

Thomson Reuters National Indices Last Net Chng WoW Chng MTD Chng YTD Chng

Malaysia 198.48 0.00 1.11% -0.15% 6.04% Malaysia 437.36 0.00 1.18% -0.55% 8.97% UAE 133.63 -0.72 -2.40% -3.21% 37.03% UAE 232.66 0.17 -1.73% -3.50% 36.03% Indonesia 288.35 0.00 9.23% -2.74% 22.82% Indonesia 487.39 0.00 7.48% -5.49% 11.34% Kuwait 96.06 -0.68 -3.57% -8.01% 1.95% Kuwait 119.71 -0.82 -2.43% -6.93% -0.61% Qatar 199.71 -0.19 -0.33% -0.33% 5.72% Qatar 211.28 -0.68 0.70% 0.37% 11.91% Bahrain 55.86 0.00 -1.72% -4.48% 4.02% Bahrain 111.09 0.78 -2.00% -0.87% 16.59% Turkey 293.04 0.00 2.79% -3.80% 14.31% Turkey 1723.68 0.00 3.56% -9.24% 2.50% Oman 159.29 -0.84 -1.29% -0.75% 12.83% Oman 113.28 0.06 -1.13% -0.88% 9.00% Egypt 104.56 0.00 3.21% -11.81% -15.69% Egypt 131.44 0.00 2.74% -11.95% -14.27%

Top Performing Sharia-based Companies Last Country Sector 5D Chng YTD Volume ISLAMIC HOLDING IHGS.QA 43.8 Qatar Financials 10.80% 13.42% 631 AL-AMAN INV CO AMAN.KW 94 Kuwait Financials 9.52% 70.37% 4,652,066 BARKA EGYPT BANK SAUD.CA 10.06 Egypt Financials 9.11% -23.44% -

TABUK AGR DEV CO 6040.SE 43.4 Saudi Arabia Non-Cyclical Consumer Goods & Services 8.77% 39.10% -

Bottom Performing Sharia-based Companies Last Country Sector 5D Chng YTD Volume

1ST PUNJAB MOD 1PUJ.KA 2.2 Pakistan Financials -13.39% -28.10% 8,000 ABG BARKA.BH 0.74 Bahrain Financials -12.50% -6.06% 201,588 ABD NAT TAKAFU/d TKFL.AD 5 United Arab Emirates Financials -10.99% -1.19% - TAKAFUL-EM/d TKFE.DU 0.62 United Arab Emirates Financials -10.40% -0.64% -

Top Performing Sharia-compliant Companies Last Country Sector 5D Chng YTD Volume

GEOSPATIAL HLD GSPH.PK 0.125 United States Energy 108.33% 78.57% 25,100 LAKE SHOR LSG.TO 0.32 Canada Basic Materials 100.00% -57.33% 1,943,213 ZCI/d ZCIJ.J 980 Bermuda Basic Materials 78.18% 67.52% 1,800 GREENFIELD CHE/d 0582.HK 0.445 Hong Kong Basic Materials 78.00% 564.18% 187,275,000

Bottom Performing Sharia-compliant Companies Last Country Sector 5D Chng YTD Volume MWANA AFRICA MWA.L 1.488 United Kingdom Basic Materials -48.52% -70.98% 1,679,177

POLIMEXMS PXMP.WA 0.22 Poland Industrials -45.00% -64.52% 21,255,590 WORKSTREAM INC C WSTMF.PK 0.25 United States Technology -44.44% -13.79% 200 PERSEUS FPO PRU.AX 0.435 Australia Basic Materials -43.87% -79.29% 11,322,204

ISLAMIC MARKET INDICATORS

Commodities Last Net Chng WoW Chng MTD Chng YTD Chng CRUDE APR3 96.49 -0.50 2.99% 4.91% 5.09% NGAS APR3 3.566 -0.47 -5.44% -10.49% 6.42% GOLD APR3 1234.8 1.00 -4.43% -11.34% -26.42% SILVER MAY3 19.60 4.94 -1.82% -11.90% -35.34% CRUDE APR3 96.49 -0.50 2.99% 4.91% 5.09% Currencies Last Bid Net Chng WoW Chng MTD Chng YTD Chng

Euro 1.3011 0.00 -0.85% 0.12% -1.39%

Japanese Yen 99.12 0.00 1.26% -1.33% 14.27%

GB Pound 1.5209 -0.00 -1.34% 0.07% -6.41%

Swiss Franc 0.9447 -0.00 1.10% -1.07% 3.19% Australian Dollar 0.9137 0.00 -0.84% -4.52% -12.09%

Indian Rupees 59.523 -0.67 0.43% 5.22% 8.24%

Malaysian Ringgit 3.158 -0.02 -1.37% 1.95% 3.30%

Bonds (Top Benchmarks) Bid Yield Net Chng WoW Chng MTD Chng YTD Chng US5Y 1.3961 0.00 -2.30% 36.34% 92.57%

US10Y 2.4875 0.00 -2.14% 16.67% 41.58%

EU5Y 0.736 0.01 -8.91% 47.49% 158.25%

EU10Y 1.733 0.00 -0.06% 14.46% 32.80%

ES5Y 3.598 -0.01 -2.68% 11.64% -11.38%

IT5Y 3.509 0.03 -1.13% 14.75% 4.59% GR10Y 11.016 -0.12 -2.61% 16.24% -6.98%

PT5Y 5.558 -0.08 -1.63% 27.04% 7.44%