COURSE BACKGROUND

Islamic finance and financial products have undergone significant progress and development since the early days of simple cost plus structures. New products and techniques are being continuously introduced all over the world, and this development and innovation is crucial for the sector as a whole. Our recently-revised and intensive 4 day course, Islamic Financial Engineering and New Product Development, follows on from our popular course, Structuring Islamic Financial Products, and builds on the concepts and techniques covered therein. The course will enable delegates to develop a detailed understanding of core products such as Sukuk and Ijarah, as well as requisites for Islamic financial engineering and the structures involved.

COURSE OBJECTIVES

This is a detailed program that will enable delegates to understand the structure of innovative Islamic financial products. The aim is that delegates are equipped to leave the course with the ability and expertise to structure new products for themselves. For this reason the course will include a number of case studies covering in detail recent and notable transactions such as DPWorld convertible Sukuk, Khazanah exchangeable Sukuk and the US$3.52billion Nakheel Ijarah Sukuk. In particular the course will enable delegates to:

• Identify requisites for Islamic financial engineering
• Understand engineered Islamic financing contracts
• Assess new financing contracts for corporations and governments
• Discuss new financing contracts for liquidity management
• Use and structure Islamic swaps and derivatives

WHO SHOULD ATTEND

This is a program for those with a good understanding of Islamic finance and financial contracts. Ideally delegates should have attended our Structuring Islamic Financial Products course, or have equivalent experience. Specifically the course will benefit the following:

• Islamic Bankers
• Corporate Financiers
• Investment Bankers
• Corporate and Commercial Bankers
• Lawyers
• Investment Advisors
• Private Bankers
• Analysts
• Portfolio Managers
• Consultants
• Government representatives

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DAY ONE

Introduction & Welcome

Why Islamic Financing Instruments?

Financial Contracts in Shariah and in Common Law

• Commonality of general requirements
• Specific emphasis in Shariah

Compatibility of Financing Contracts with Shariah

• Justification of earning: ownership versus actual work
  
• Prohibition of interest
• Implication of requirements of currency exchange
• Other non-permissible contracts

Requisites for Islamic Financial Engineering

• Shariah requisites
• Legal requisites
• Practitioner’s requisites
• Conventional financing knowledge requisites

DAY TWO

Engineered Islamic Financing Contracts

• The Murabahah era
• Istisnah
• Compound Salam

Approaches to Islamic Financial Engineering and Developing New Products

• Role of Shariah advisors
  
• Role of lawyers
• Marketing considerations

Structuring New Financing Contracts for Liquidity Management

• Tawarruq
• Reversed Murabahah
• International inventory financing
• International reversed Murabahah

DAY THREE

Structuring New Financing Contracts for Corporations

• Purchase / installment sale contracts
• Bai Bithaman Ajil (Purchase / lease back)
• Build Operate Transfer (BOT)
• Output / revenue sharing contracts
• Inventory Murabahah financing
• Three party Istisnah
• Murabahah and reverse Murabahah line of credit

Structuring New Financing Contracts for Governments

• Build Operate Transfer (BOT)
• Output sharing
• Construction of public services
• Build / lease operations

DAY FOUR

This section examines the flourishing global Sukuk market and development of Islamic hedging tools. The session will briefly introduce the concept of Sukuk but will focus more on the development of new Sukuk uses and structures. The session will allow delegates to understand the opportunities in the Islamic derivatives sector, but also the inherent restrictions placed on the development of these products.

Securitization and Sukuk

• The foundation of Islamic securitization
• Ownership and Sharikat al Milk
• Negotiability conditions
• The scope for new product development

Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI) Sukuk Standards Ijarah-based Sukuk

• Lease property Sukuk
• Manafi’ Sukuk
• Services Sukuk

Revenue Generating Property Sukuk

• Revenue sharing Sukuk
• Temporary common shares

Developing Islamic Swap Instruments

• Introduction to Islamic derivative concepts:
  

• Arbun structure
• Salam structure
• Mutual Wa’d structure

• Converting conventional debts instruments into sharing securities
• Converting debt instruments into asset - based, rent generating securities
• Converting debt instruments into tradable usufruct securities
• Converting debt instruments into non - tradable usufruct securities
• Converting debt instruments into inventory securities
• Converting debt instruments into bundles securities
• Challenges developing Islamic derivatives

Course Conclusion & Review

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EXPERT COURSE DIRECTOR

Dr. Monzer Kahf
Former Senior Economist
Islamic Development Bank, Saudi Arabia

Dr Monzer Kahf has written more than 25 books in English and Arabic, on Islamic banking and finance, Islamic economics, Zakah and Awqaf, including some which have become the standard reference manuals in the field. He has had more than 70 articles and encyclopedia entries published on Islamic economics, Islamic public and private finance, Islamic banking, Zakah, Awqaf, including entries in the Oxford Encyclopedia of the Modern Islamic World.

Dr. Kahf has undertaken scores of training programs and served for 15 years as a Senior Research Economist, specializing in Islamic economics, finance and banking, at the Islamic Development Bank in Jeddah, KSA. His training programs, both public and private, have been conducted throughout the Middle East, Asia, Africa, Europe and North America. In 2001, Dr Kahf was awarded the Islamic Development Bank Prize in Islamic Economics in recognition of his valuable contributions to the sector. Dr Kahf graduated BA in Business from the University of Damascus, Syria, and obtained his PhD in Economics from the University of Utah, Salt Lake City, USA. He is a founding member of the International Association of Islamic Economics and of the Association of Muslim Social Scientists of the United States and Canada.

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DATES & PRICE

Discounts

• Why not take advantage of our special group booking incentive and train a number of your team members at once?  Send 3 delegates to any one course and receive a fourth place completely free of charge.  Further incentives are also available for higher delegate numbers – please contact us directly for more details.

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