The Star Online

Mudajaya unit issues #sukuk

Mudajaya Group’s unit, Sinar Kamiri, has issued its RM245mil green SRI sukuk wakalah. The coupon rate is between 4.96% and 6.35% per year and the coupon will be payable semi-annually. Proceeds from the issuance of the sukuk will be utilised for the development of a large-scale solar photovoltaic energy-generating facility of 49MW in Perak. The company stated that the issuance of the sukuk is not expected to have any material effect on the net assets and earnings per share of Mudajaya for the financial year 2018. However, the gearing and interest cost for Mudajaya are expected to increase for FY18 and onwards.

Khazanah's RM1.27b #Sukuk oversubscribed 5.5 times

Khazanah Nasional's exchangeable Sukuk of USD320.8mil (RM1.27bil), which has a tenure of five years, was oversubscribed by 5.5 times. The exchangeable Sukuk would reference the value of H-shares in CITIC Securities, China’s largest securities brokerage firm. Khazanah managing director Tan Sri Azman Mokhtar said it was opportune for the fund to price the deal on the back of positive market sentiments in China. The exchangeable Sukuk is structured based on the principle of Wakalah and provides the Sukuk holder with the option to receive cash or shares upon exchange. The Sukuk will be listed on the Singapore Exchange Securities Trading Limited, Labuan International Financial Exchange and Bursa Malaysia. CIMB and J.P. Morgan are the joint bookrunners and joint lead managers for this exchangeable Sukuk transaction.

Nominations open for Royal #Award for Islamic Finance

The Royal Award for Islamic Finance is on a global search for an exceptional individual in the field of Islamic finance. The biennial award is spearheaded by Bank Negara Malaysia and the Securities Commission Malaysia. It recognises Islamic finance visionaries who contribute significantly to the growth of Islamic finance. The award recipient is selected by an independent seven-member international jury chaired by Tun Musa Hitam. The most recent recipient of the Royal Award for Islamic Finance in 2016 was Prof Datuk Dr Rifaat Ahmed Abdel Karim. He was instrumental in founding the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB). The closing date for nominations is March 31, 2018, and interested persons can submit their nominations online.

The new #sukuk way for efficient construction financing

#Malaysian real estate developer SkyWorld is raising some RM50mil under tranche one of the RM600mil sukuk musharakah programme for its SkyAwani Residence development in Kuala Lumpur. The novel sukuk transaction is the first securitisation of progress billings combined with affordable housing. RAM Ratings Services has assigned a preliminary AA3/stable rating for the sukuk, while Danajamin Nasional is guaranteeing the support facilities. Developed, arranged and advised by NewParadigm Capital Markets, the project has achieved 100% sales. According to NewParadigm executive director Danny Kwan, the primary objective of this financial programme is to monetise the unbilled sales upfront rather than later. It provides for more efficient cashflow management for the residential developer.

#Takaful #Malaysia forms partnership with Ambank Islamic

Syarikat Takaful Malaysia said it has formed a partnership with AmBank Islamic and will market its general takaful products across the country. The takaful operator said that general takaful products for motor, fire/house and personal accident will be distributed across Ambank Islamic's distribution channels. The two companies will also promote new general takaful solutions tailored to Ambank Islamic's customers. Takaful Malaysia group CEO Datuk Sri Mohamed Hassan Kamil said he was delighted to bring the group's general takaful solutions to serve the evolving needs of AmBank Islamic customers.

Maybank Islamic launches rent-to-own #housing #scheme

Maybank Islamic has launched a rent-to-own (RTO) housing scheme. Named HouzKEY, the product is targeted at first-time house buyers and those who want to upgrade their homes. According to Maybank Islamic's CEO, Datuk Mohamed Rafique Merican, HouzKEY addresses the growing issue of concern for affordable home ownership. The new product will initially be made available to Maybank employees and is slated to be rolled out to the general public in early 2018. HouzKEY is the first such RTO product in the country fully enabled on a digital platform, with the application and submission of supporting documents being required to be made online. To be eligible, applicants should have a household income of at least RM5,000 and commit to a minimum rental tenure of five years. They will have the option to purchase the property after one year at a pre-agreed price.

Al Rajhi Bank eyes Asean #expansion

Al Rajhi Bank #Malaysia outgoing chairman Datuk Seri Dr Nik Norzrul said his successor would continue with the plan to expand the bank’s operation, targeting neighbouring markets like Singapore and Indonesia. Nik Norzrul has been with Al Rajhi Bank since the bank established its wholly-owned subsidiary in Malaysia in 2006. He has been a board member of Al Rajhi Bank Malaysia since 2006 and its chairman since 2015. Today the bank has assets worth a total of RM9bil, compared with RM291mil in 2006. In the retail segment, the bank continues to see growth in the demand for current account/savings account services. In the corporate segment, Nik Norzrul said Al Rajhi Bank Malaysia was working on strengthening its presence targeting owner-led enterprises as well as SMEs.

Danajamin issues RM500m tier-2 subordinated #sukuk

#Malaysian Danajamin Nasional has issued its inaugural RM500 million, tier-2 subordinated sukuk. It is part of a RM2 billion of senior and subordinated Sukuk Murabahah facility. The subordinated sukuk has a tenure of 10 years and is rated AA1 by RAM Rating Services and AA+ by the Malaysian Rating Corporation. The inaugural issue was oversubscribed, receiving a response of about RM800 million from a diverse range of investors. Danajamin CEO Mohamed Nazri Omar said that a total of 16 investors participated in the inaugural issuance and the sukuk achieved a yield of 4.80%. The issuance also sees Danajamin strengthening its regulatory capital level, enabling it to continue meeting its developmental mandate to stimulate the sukuk market.

Talent deficit in Islamic finance affects quality #sukuk issuance

The shortage of high-quality sukuk in the Islamic finance market is a result of the deficit in virtuous talent, according to Datuk Mohammad Faiz Azmi, Former Malaysian Institute of Accountants (MIA) president. He also said there was a lack of safe assets at present, leaving issuances by the government always oversubscribed. He added that the opportunity now existed for sukuk issuance from Indonesia, which has a lot of infrastructure plans such as to build more roads, have trains, ports, better airports and others. In a recent Bank Negara strategic paper, the central bank revealed that the annual growth rate of the Islamic finance industry had slowed from 24.2% in 2011 to 8.2% last year. Mohammad Faiz said MIA has launched the Mini Pupillage Programme to create a pool of knowledgeable and specialised talents in the area of Islamic finance.

More Chinese companies to raise funds via #sukuk?

As a China state-owned enterprise (SOE) issued its first ringgit sukuk in the domestic bond market, many are wondering if other China companies would be doing the same. Beijing Enterprises Water Group (BEWG) issued RM400mil worth of medium-term notes on July 19 to finance its water treatment project in Kemaman, Terengganu. The sukuk issuance also marks the first ringgit-denominated sukuk by a China state-owned company for water infrastructure funding in Malaysia. According to analysts, China-based entities do not prefer to tap into the domestic sukuk market, as they are backed by strong financing sources from their home country. BEWG chief executive officer Datuk Vence Ong Kian Min noted that this was BEWG’s first-ever debt capital market instrument and the issuance has enabled the group to diversify its funding sources. The RM687mil project is expected to be completed in 2018.

Hong Leong Islamic Bank appoints Jasani Abdullah as CEO

Hong Leong Islamic Bank (HLISB) has appointed Jasani Abdullah as chief executive office. HLISB said Jasani has been acting CEO since December 2016. He has been in the financial industry for more than 30 years and his contribution towards the Islamic banking sector is very much valued. Jasani has been with HLISB since 2007 when he first joined as the head of shariah and product development. Jasani graduated with a Diploma in Public Administration from MARA Institute of Technology Malaysia, Bachelor in Business Administration from Ohio University, USA and has a Post Graduate Diploma in Islamic Banking and Finance from International Islamic University Malaysia.

Yeow joins Alkhair International Islamic Bank as CEO

Alkhair International Islamic Bank (AKIIB) has appointed Yeow Tiang Hui as its chief executive officer effective Aug 1.
AKIIB said in a statement that he succeeded Datuk Adissadikin Ali, who left the bank last year to head RHB Islamic Bank. Yeow has worked at several multinational banks, including managing the multinational portfolio at Deutsche Bank and being vice-president of Citibank/Citicorp’s venture capital outfit and its head of commercial banking. From 2007 to 2016 he served as head of corporate banking at Kuwait Finance House in Malaysia.

Sime’s #sukuk plan gets okay, crucial step to carve 3 listed companies

#Malaysian holding company Sime Darby has received approval from its bondholders to restructure US$800mil (RM3.46bil) worth of sukuk. Holders of the sukuk approved the company’s plan to buy back the papers or replace the borrower to Sime Darby Plantation from Sime Darby. The broader reorganisation of the group involves the proposed listing of Sime Darby Plantation and Sime Darby Property through share distributions. Sime Darby will remain listed, owning the automotive, industrial equipment and logistics businesses. The holding company plans to create three standalone businesses: plantation, property and trading, and logistics. Plantation and property would be listed on Bursa Malaysia, while trading and logistics would remain under Sime Darby.

RAM: Q1 global #sukuk issuance at US$22.2bil

According to RAM Ratings, global sukuk issuance reached US$22.2 billion (US$1=RM4.33) at the end of March, a marginal decrease from US$24.1bil recorded in the same period last year. Malaysia maintained its leadership by accounting for 38.5% of the total issuance. The ratings agency said Indonesia was next (24.7%) followed by Qatar (9.9%) and the United Arab Emirates (9%). The outstanding global sukuk summed up to US$346.7bil, as at end-March 2017, with Malaysia maintaining its leadership by commanding 48% of the amount. Ruslena Ramli, Head of Islamic Finance at RAM Ratings, said that other Gulf Cooperation Council nations are expected to include sukuk issuance as a debt management strategy. On the domestic front, outstanding Malaysian sukuk expanded 11.5%,year-on-year, to RM691.4bil, as at end-March 2017, from RM620.1bil recorded in the same period last year.

Wahid urges more listings of Islamic financial institutions on Bursa #Malaysia

The listing of more Islamic financial institutions on Bursa Malaysia is needed to boost the Islamic fund and wealth management industry going forward. The Permodalan Nasional Bhd (PNB) group chairman Tan Sri Abdul Wahid Omar said this would also strengthen Malaysia's position as a global financial hub. He said that of the 672 syariah-compliant securities listed only two were from the finance sector, namely, BIMB Hodings and Syarikat Takaful Malaysia. Wahid said the shortage of listed Islamic finance institutions could pose big challenges to the industry, especially for the government-linked investment companies. He also suggested three possible ways to further grow the industry. The first is the formation of a second listed Islamic universal banking group, apart from BIMB Holdings. The listing of some of Islamic Development Finance Institutions such as Bank Simpanan Nasional and Bank Rakyat is a second option. The third approach is the creation of a separate listing among banking groups that have sizeable Islamic finance activities embedded within them, such as Maybank, CIMB and RHB.

RHB Islamic Bank issues RM250mil #sukuk

#Malaysian RHB Islamic Bank has issued RM250mil subordinated sukuk murabahah, the bank's first bond issuance in about three years. Parent company RHB Bank said the sukuk would mature in 10 years and could only be redeemed from the sixth year onwards. It has a fixed profit rate of 4.88% per annum, payable semi-annually in arrears throughout the entire tenure. RHB said proceeds raised from the sukuk issuance would be used for RHB Islamic’s syariah compliant working capital. In 2016, RHB Islamic turned in a profit after tax of RM324.8mil, a 27.4% increase against RM254.8mil in the preceding year.

Growing #demand for #fintech in #Islamic #finance

The IFSB sees growing demand for fintech within the Malaysian Islamic financial services system, because customers are looking for alternatives.
IFSB secretary-general Jaseem Ahmed said „demand for fintech within Islamic finance had increased following the global financial crisis“ and further that “There are tremendous opportunities for fintech within Islamic finance. In the aftermath of the global financial crisis, there has been a loss of confidence, so people are looking for alternatives,”
Jaseem added that commercial banks are really taking up fintech to reach out and improve the attractiveness of their products at a lower cost and also said that he expected sukuk issuance to continue remaining strong in Malaysia.
The IFSB event, which ends tomorrow, comprises forums that bring together key stakeholders of the Islamic financial services industry.

Bhaimia named CEO of Asian Finance Bank

Asian Finance Bank (AFB) has appointed Khalid Mahmood Bhaimia as its new chief executive officer effective from March 21, 2017. Bhaimia has over 20 years of experience in the global Islamic banking industry. He previously served as the CEO of Unicorn International Islamic Bank and RHB Islamic Bank as well as Hong Leong Islamic Bank’s managing director. AFP is a full-fledged Islamic bank and is backed by a consortium of shareholders comprising Middle Eastern financial institutions.

RHB aims to be among top three in Islamic banking

RHB Bank is eyeing the top three spot in the Islamic banking space for its syariah complaint unit. RHB Islamic Bank CEO Datuk Adissadikin Ali said growth in the recent past years had been strong and that the bank could continue riding on this growth. He said the contribution of Islamic banking assets to the group’s total assets is 25% and that the aim was to grow this figure to 40% by the year 2020. The group syariah business is identified as one of RHB’s key growth areas under its Ignite 2017 transformation programme. The bank intends to achieve by 2017 a return on equity of more than 14%, double contributions from Singapore to 10%, have 30% in overseas contribution, scale growth in small and medium enterprises, and have Islamic banking accounting for 30% of its assets.

Islamic finance players urged to collaborate with #fintech firms

Global Islamic finance players should develop data analytics ability in the Waqf, high-net worth individuals, stocks and infrastructure sectors. Data anlaytics would help them to capture the additional US$1 trillion market which will be available over the next 12 to 18 months. The survey entitled 'Banking in Emerging Market, Gulf Cooperation Council FinTech Play 2017' was launched at the three-day World Islamic Bank Conference (WIBC) 2016. The study found that between 60 and 70% of the participants believed fintech innovations offer end customers a noticeably better value proposition in terms of ease of use, cost, speed of service and integration with social media. Ernst and Young's Global Islamic Banking Sector Partner, Ashar M. Nazim said proper adoption of fintech technology by the global Islamic finance players would potentially increase the industry’s customer base to 250 million by 2020 from 100 million at present.

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