Islamic Capital Markets and Structured Products
15^th & 16^th August 2007, Kuala Lumpur

Workshop A

Latest Structuring Issues in the Islamic Capital Market:
Sukuk & Derivatives 

Introduction to Primary Underlying Principles of Islamic Finance as applied in the Capital Markets

• Questions of riba & gharar
• Possession, Ownership

Capital Markets & Securitization

• Types of Sukuk and comparison with conventional bonds and Asset Backed Securities
• Overview about recent issues of Sukuk and the market demand/subscription
• Overview of market growth, demand factors, and absence of secondary markets

Legal, Tax and Infrastructure Concerns for the Islamic Capital Markets

• Offering requirements for placements in the Middle East
• Trust and SPV rules, absence thereof.  The True Sale challenge
• Regulatory developments and differences from jurisdiction to jurisdiction.
• Structural problems in the different key markets
• Role of the Ratings Agencies

Case Study: Syndicated Transactions v. Sukuk

• Analysis of typical syndicated Islamic lease
• Analysis of typical sukuk al ijarah
• Comparison to sukuk al musharakah
• Whither the BBA?
• Discussion of market opportunities and challenges

Question & Answers

The Musharakah, Mudaraba & Wakala

• Flexible models and key examples
• Discussion of recent experiments and there challenges and or benefits from both Shariah and business perspective

Islamic Principles applied to Future Flow and Revolving Syndication

• Structural Headaches
• Market needs and Prospective Solutions

Sub-ordination, Convertibility, Exchangeability: the New Sukuk Derivatives

• Are Malaysian sub-ordination concepts going to fly in the GCC, why or why not?
• Why has convertibility and exchangeability crept into the market, what are key structure points? Model deals?

Derivatives: An Under-Explored Frontier

• Risk Dispersion/Hedging v. Arbitrage
• Key Financial Instruments
• Futures, Forwards, Options, Warrants & Arbun
• Strategies

Wrap-Up and Q&A
                     

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Workshop B

Structuring Islamic Derivatives & Treasury Products
16^th August

Introduction

• Traditional Derivatives thinking & Islamic rules?
• The Hashimi Frame and implications for Islamic innovation
• Sarf, Riba and Gharar
• The only slide you ever need to remember for Islamic finance?

Key Financial Instruments

• Key risks

• Transaction Exposure
• Translation Exposure
• Economic Exposure
• Interest Rate Exposure

• Financial risk types or "50 ways to lose your money"
• Risk management terms
• Key financial instruments

• The Basic Building Blocks

• Deposits, forwards, futures, options

• Financial risk management instruments

• Currency Management
• Interest rate Management
• Other risks

• Derivatives for the retail client

• Structured Products

Cases in innovation: from creativity to closing

• The Break Forward
• Perpetual Swaps

Risk Management

• Hedge choice and performance measurement
  • Determining the benchmarks
• Overview of legal risk management
• Overview of taxation aspects of derivatives and risk management

Back to the Future: Current Developments and Trends

• Credit and insurance derivatives
• Dangers and disasters; profits and principles
• The financial future

Islamic Capital Markets & Securitization

• Types of Sukuk and comparison with conventional bonds and Asset Backed Securities
• How Sukuk concepts map to core Islamic instruments
• Overview about Sukuk market demand and structure, market growth, demand factors, and absence of secondary markets outside of Malaysia

Intifa’a and Musharakah and Future Flow Securitizations

• Deconstruction of Zam Zam and Safina Sukuk Issues
• Analysis of Investment Dar Issue
• Review of Cylinder
• Cross Boarder Sukuk Concepts

Islamic Derivative Concepts

• Examine the concepts of “Hedge Fund” v. “hedging” v. “arbitrage”
• Discussion of the Long Term Capital Markets problem –why certain concepts cannot be applied
• Key principles of permissible derivatives:
  • The Edwardes – Kamali Derived Analysis
  • Short sale issues reviewed
  • Option issues reviewed

Tawurruq & Islamic Swaps in Derivatives Context

• Compare and contrast to “true” murabahah and salam.
• Discuss application for both hedging and risk management
• Recent Developments in the revitalization of “cash & carry”
• Examine concerns among scholars and market participants
• Analysis of the BNP-Paribas swaps as offered to Perdana

New Directions in the Synthesis of Hedging Solutions and Derivatives in the Islamic Context

• Promises, Profile Exchanges and the current thought processes
• How salam, intifa’a and arbun are providing hedging opportunities
• Synthetic Options that are Shariah compliant?
• Prospective Islamic copycats in the derivatives space.

Module Conclusion and Wrap-up

Expert Workshop Leader

Abdulkader Thomas

President & CEO, SHAPE™ Financial Corp. Arlington, Virginia and Kuwait. Consultants to the US and international financial community in matters relating to Shariah compliant financial structuring; sub-advisor to the global securities industry with respect to Sukuk and other forms of Islamic transactional issuance; and Islamic banking training resource. Present & past clients include University Bank of Ann Arbor, APICORP of Saudi Arabia, FWU Group of Germany, Salam Financial Corp. of Toronto, Siraj Capital, Ltd. of Jeddah, First Investment of Kuwait, Qatar Consulting of Doha, Khazaen Venture Capital of Kuwait, Taj Capital of Toronto, and others.

Abdulkader has over 25 years of diversified financial services experience. A graduate of the Fletcher School of Law & Diplomacy in international trade, Abdulkader earned a BA with honors in Arabic & Islamic Studies from the University of Chicago. 

Based in Kuwait, Abdulkader has worked in Bahrain, New York, London, Washington, D.C., and Los Angeles. His areas of activity have included trade finance, real estate finance, securities, and Islamic finance at Citibank, Credit Lyonnais, Sumitomo Bank, Ltd., The United Bank of Kuwait, and MEF Money/Guidance Financial Group.

Abdulkader is responsible for shepherding the first US banking regulatory approvals of Islamic financial instruments for Ijarah wa Iqtina and Murabahah. More recently Abdulkader secured regulatory approval for an Islamic profit sharing deposit to be applied in the US. Abdulkader also structured the first REIT of REITs structured to allow Muslims to invest in listed US REITs whilst complying with Shariah. Abdulkader has also been involved in the structuring of inbound foreign investment for both the US and the UK. Abdulkader has included supervising marketing and consumer demographics in conjunction with new business launches.

Workshop Venue: TBA

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