December 2011

Last month, the world's first Islamic Interbank Benchmark Rate (IIBR) was launched. It was the result of a collaborative approach taken by many Islamic financial institutions, industry associations and Sharia scholars to decouple Islamic finance from a conventional western pricing benchmark (Libor). The IIBR is an interbank benchmark that offers a reliable and realistic standard to better measure the cost of funding for Islamic financial institutions.

IIBR brought together more than 20 Islamic finance institutions to create a proprietary Islamic pricing benchmark. It is a major indication to the world that Islamic finance has come of age. The benchmark is designed to be used to price a number of Islamic instruments including common overnight to short-term treasury investment and financing instruments such as murabaha, wakala and mudaraba, retail financing instruments such as property and car finance, and sukuk and other Sharia-compliant fixed-income instruments. It can also be used for the pricing and benchmarking of corporate finance and investment assets.

Link: http://www.thenational.ae/thenationalconversation/industry-insights/finance/benchmark-a-major-step-for-islamic-finance

GCC is the fastest growing region for downstream petrochemical industry in the world. In a new study conducted by UK-based Ispy Publishing (and summarized by gulfnews in the link below), the plastic industry is projected to grow 30% annually over the next 5 years, spurred by factors including lower feedstock, rising consumer spending and high level of government incentivization.

Led by Saudi Arabia, the Gulf accounts for 11% of the $600 billion (Dh2.2 trillion) global petrochemical industry. Over the next five years, the Gulf's market share of the global petrochemical industry will jump to over 17 per cent—highlighting the importance of this industry as the second biggest source of income for Gulf countries after oil, the report said.Plastics packaging, with a global value expected to reach $180 billion in 2011, will dominate the industry's growth in the Middle East, the report said.

Link: http://gulfnews.com/business/general/petrol-to-plastics-bagging-the-future-1.952591