Asia

Global finance structures must be revamped, says UN expert panel

International finance structures must be drastically overhauled in the face of the current global economic crisis, a panel of experts convened by the United Nations General Assembly chaired by Joseph Stiglitz, winner of the 2001 Nobel Prize for Economics said.

The expert panel made a number of suggestions to support developing nations and creating an international infrastruture for the global markets led by the United Nations.

The panel included Dr Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia.

Abu Dhabi's Hilal Bank sets up Kazakh unit

Stanley Carvalho reported on 31 March on Reuters that Abu Dhabi's government-owned Al Hilal Bank will set up an Islamic bank in Kazakhstan. Al Hilal will headquarter the new bank in the central Asian state's capital Almaty, opening in the second half of 2009 with an initial capital of AED 100 mn(USD 27 mn).

Chairman of Hilal Bank is Ahmed Ateeq al-Mazrouei.

HSBC Gets Approval For Selling Sukuk In Hong Kong

HSBC has received approval from the Hong Kong Monetary Authority to sell Sukuk (Islamic Bonds) in Hong Kong, the first local bank in the territory to do so.

Bruno Lee is head of liabilities business and wealth management.

Egon Zehnder executive search assigned to find new EON Bank head

Yap Leng Kuen reported in the The Star that the International search firm Egon Zehnder International has been appointed to find a replacement for former EON Bank CEO Albert Lau Yiong.

Brunei short term Sukuk

The Ministry of Finance, Brunei Darussalam announced the successful pricing of its 24th, 25th, 26th and 27th issuance of short-term Sukuk Al-Ijarah securities. The accumulated total of these four Sukuk issuance was B$ 165 million; B$ 31 million for Series 24, B$ 60 million for Series 25, B$ 11 million for Series 26 and B$ 63 million for Series 27.

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Sustainability, Islamic Finance and Managing Risk While Seizing Opportunities

I just published an article with the Dow Jones Islamic Market Indexes Newsletter, giving an overview about the lines of arguments regarding performance and ethical screens, be it Islamic or Sustainability and what empiricial findings have been published.

It is claimed by critics that the reduction of the universe through ethical screens shall reduce the performance, likewise corporate social responsiblity comes against a cost. Similar counterarguments have been raised regarding Islamic screening criteria.

Bank Sarasin published a study doing own research with partners and reviewing published empirical analyses in the literature. It shows that there is no negative impact on performance. My review of empirical analyses in regard to Islamic finance concluded the same and all publications let conclude that ethical screens add value by way of risk management. An example is the debt limitation of the Sharia tolerance criteria.

Ethical screens may therefore improve the investment decision process and more research shall determine, which factors add value to the portfolio and therefore form part of a professional process.

Allianz has seen robust performance in Muslim markets

Allianz Indonesia grew by 8.5 % and is the fourth biggest life insurer in the country. In 2008 the MENA region has proven to be one of Allianz's growth powerhouses. Revenues from the region grew to 2.4 billion euros, an increase of 40 percent from last year. In Asia Pacific Property and casualty business (P&C) remains growth driver, unique opportunities to strengthen distribution.

Allianz offers conventional and Islamic coverage.

CIMB Islamic has USD 2.5 bn Sukuk in pipeline / plans infrastructure fund

B.K. SIDHU reported in The Star Malaysia on 30 Marcht that it has won 19 mandeates to raise nearly USD 2.5 bn from the Islamic capital markets and that it is planned to launch a USD 500 mn infrastructure fund. The issuers of the Sukuk are partially situated in the Gulf including a sovereign.

Badlisyah Abdul Ghani is the CIMB Islamic chief executive officer.

Bursa Malaysia Readies Islamic Short-Selling System

Bursa Malaysia’s regulated platform has not finalised the precise structure yet. But according to Bursa Malaysia CEO Yusli Mohamed Yusoff Short-selling is perceived as an essential ingredient for capital markets to perform efficiently.

Standard & Poor’s Ratings Address The Growing Takaful Market

Press Release

LONDON, March 30, 2009 -- In a report published today, Standard & Poor's Ratings Services explains the way that its rating approach has been adapted to meet the growth of takaful insurance.

The article, "Standard & Poor's Approach To Rating Takaful And Retakaful (Islamic Re/Insurance) Companies," says that the last five years have seen takaful (Islamic insurance) grow from a niche product servicing relatively limited demand to become a mainstream risk management offering.

"In particular, we have seen rapid growth in the Arab world and an expansion across Europe. A further market development has been the growth of retakaful as a Sharia-compliant version of reinsurance," said Standard & Poor's credit analyst Kevin Willis.

Standard & Poor's has rated a number of Islamic insurers and reinsurers and so is able to comment on the way that the rating criteria have been adapted to address the specifics of this product.

First Islamic Bank in Sri Lanka

The Amana Group was recently given a Letter of Provisional Approval by the Central Bank (CB) to establish a licensed commercial bank named Amana Bank Ltd., among the conditions is to raise a minimum capital requirement of Rs 2.5 bn.

Kyrgyzstan introduces Islamic banking legislation

The country’s parliament has approved legislation enabling all commercial banks in Kyrgyzstan to operate according to Shari’ah principles. National Bank of Kyrgyzstan will be responsible for issuing licences to Shari’ah-compliant financial institutions, as well as supervising and regulating their activity.

Malaysian Rating Corp. plans to offer Sharia Ratings

Malaysian Rating Corp. starts offering from July 2009 onwards services to rate the degree of Sharia compliance of Islamic financial institutions. The audit will review the risk management culture and frequence of Sharia meetings aside from management skills.

The Agency targets fund managers, insurers and banks in Malaysia first before it plans expansion to South-East Asia.

Mohd Razlan Mohamed is the CEO of the Malaysian Rating Corp.

Unicorn Malaysia aims to service demand among SMEs

Unicorn International Islamic Bank Malaysia Bhd, aims to achieve transactions totalling USD 400 mn to USD 500 mn this year as the demand for medium-sized issuance, especially sukuk and cross-border transactions from small and medium enterprises, continued to be strong with a ticket size of USD 50 to 100. A focus would be on bridging and construction financing, as well as placement of equities and funds.

Unicorn has four business lines – treasury, corporate banking, investment banking, and strategic acquisitions/direct investment.

Unicorn Malaysia announces maiden net profit

Unicorn International Islamic Bank Malaysia Berhad has reported a net profit of MYR 812,546 (USD 223,993) for 2008, its first full year of operation with an international Islamic bank license awarded under the Malaysia International Islamic Financial Centre (MIFC) initiative. Unicorn Malaysia is a wholly-owned subsidiary of Bahrain-based Unicorn Investment Bank.

The bank, with the BNM’s approval, has also increased its paid-up capital via a non-renounceable rights issue. As of year-end 2008, the Bank’s paid-up capital stood at MYR 71.9 million (USD 19.8 mn), versus a MIFC minimum capital requirement of MYR 10 million (USD 2.7 mn)

Unicorn Malaysia has four business lines: Treasury, Corporate Banking, Investment Banking and Strategic Acquisitions/Direct Investment.

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i-VCAP Receives Securities Commission approval to be a full-fledged Islamic Fund Management Company

i-VCAP Management Sdn Bhd announced it has received approval from the Securities Commission to operate as an Islamic fund management company. The firm is doing Islamic fund management under the general licence for some time.

Zainal Izlan Zainal Abidin is the CEO.

Amanie Business Solutions LLC. launches its Shariah compliant stocks screening service

Amanie Business Solutions LLC. officially launched its web integrated Shariah stock screening service, the service will target new entrants into the Islamic fund management industry.

The web delivery platform of Amanie Screening can be accessed through http://www.amaniescreening.com . Investors and fund managers will be able to view the details and features of the Shariah Stock Screening service.

Amanie is a Shariah advisory and education company seeking to serve the global Islamic finance community.

Thailand Sukuk planned

The Islamic Bank of Thailand (IBT) plans to rise between USD 70 mn to USD 200 mn via Sukuk in Malaysia and Middle East countries by this year. Malaysia's second largest banking group CIMB, and its newly acquired BankThai, had approached the IBT to launch the Sukuk bond in Malaysia.

Indonesia global sukuk to be backed by USD 650 mn assets

Indonesia's finance ministry plans to sell its first global sharia-compliant bond issue, or sukuk, before June, backed by 7.5 trillion rupiah (USD 650 mn) worth of assets. The sukuk will be issued according to the ijara, or lease-based, principle.

2nd World Congress of Muslim Philanthropists: Fostering Partnerships

PRESS RELEASE

Conventional to Strategic: A New Paradigm in Giving

March 22-23, 2009 • Abu Dhabi, UAE

Abu Dhabi, UAE: The 2nd World Congress of Muslim Philanthropists (WCMP) concluded today after several key developments had been achieved that indicate an evolution in Muslim giving. The WCMP is a high-level network of donors and foundations established to promote informed and effective giving. The annual Congress itself is a unique event which brings together a diverse set of participants, with the hope that enhanced cooperation between different philanthropies through strategic partnerships will add profound value to address global challenges that affect both humanity and the environment.

Dr. Tariq Cheema, the founder of the WCMP, affirms that the World Congress of Muslim Philanthropists (WCMP)' brings together leaders who understand the risks and opportunities they have are common as global citizens, and therefore realize that collaboration across the lines of faith and race is a necessity and not merely a choice'.

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