In This Issue: The Islamic Financial Industry Comes Of Age: Double-digit growth rates for Sharia-compliant assets over the past decade have naturally driven Islamic financiers to look beyond historical boundaries to explore new territories, both within and outside the Arab world. The size of global Sharia-compliant assets is estimated today at up to $400 billion, whereas Standard & Poor's Ratings Services believes the potential market for Islamic financial services to be closer to $4 trillion, meaning that Islamic finance currently has only a 10% market share among the Muslim community globally and still a long way to go.The Meaning Of Ratings For Islamic Financial Institutions: Islamic financial institutions (IFIs) differ from conventional banks in several important ways, yet Standard & Poor's Ratings Services assigns ratings to financial institutions globally, regardless of their economic nature, legal form, or specific features. Standard & Poor's Classic Ratings Approach Applies To Islamic Banks: From Standard & Poor's point of view, Islamic banks are not more or less creditworthy than conventional banks of similar size and profile, but they do have unique characteristics that influence their credit profile. Islamic banks today generally feature higher profitability, cheaper and more stable deposits, and higher customer loyalty than for conventional peers. Islamic Finance Is Securitization's New Frontier: With the first Islamic structured financings in the U.S. and Malaysia, yet another chapter has begun in the global securitization market. Their emergence, in both local and cross-border markets, shows great potential, especially as the assets being securitized begin to diversify and the market grows accustomed to the intricacies of the financing technique. Sharjah Islamic Bank's Sukuk Trust Certificates: In September 2006, Standard & Poor's assigned its 'BBB' preliminary rating to Sharjah Islamic Bank's U.S. dollar floating-rate sukuk trust certificates due 2011, the first-ever rating it assigned on this type of instrument. This presale report discusses the details of the transaction. Islamic Banks In Malaysia Less Profitable Than Gulf Counterparts: Islamic banking in Malaysia, which has the third-largest economy in Southeast Asia, has been growing at a strong compounded annual rate of 27%, in terms of assets, over the past 10 years. However, these banks are less profitable than their Gulf counterparts when comparing various ratios due to differences in funding costs and market share, among other things. Creating Sharia-Compliant Equity Indexes: In response to the needs of Muslim investors, Standard & Poor's will launch later this year three equity indexes that track the stocks of Sharia-compliant companies. These indexes are designed to provide Sharia-compliant alternatives to the benchmark S&P 500, the Standard & Poor's Europe 350, and the Standard & Poor's Japan 500. | 
