Asia

Etiqa Takaful Bhd crossed RM 1 bn in premiums

Etiqa Takaful Bhd recorded for the financial year ended June 30 last year a premium of RM 1.044 bn. It is the first takful company to cross this level and the largest in the world. Currently, the company has about a million policy holders.

Mohd Tarmidzi Ahmad Nordin is Chief Executive Officer.

Pakistan still substantal cash outside the banking system

Adviser to PM on Finance Shaukat Tareen has asked Islamic banks to bring billions of rupees in formal banking which are kept with the people on religious grounds.

Tareen said that this huge amount can be brought in for productive purposes and channelised into a profit and loss based system of banking.

Parsoli promoters barred from trading

Zafar and Uves Sareshwala, promoters of broking firm Parsoli Corporation, were debarred by the Securities and Exchange Board of India (Sebi) after they were found to have fraudulently transferred shares of genuine investors to their own accounts.

Indonesia follows up on strong sukuk debut

John Aglionby reported on 23 February in the Financial Times that Indonesia is planning further after seing the first retail Sukuk being an outstanding success raising Rp 5,556bn (USD 466 mn) compared with the target of Rp 1,700 bn. The coupon rate is fixed at 12 per cent over three years and is paid monthly.

USD denominated Sukuk to retail investors and medium-term notes, the latter expected to be in the region of USD 3 bn, are still under consideration. The global sukuk and medium-term notes have been delayed after a successful international roadshow this month, pending parliamentary approval for the government’s revised budget.

Indonesia Retail Sukuk demand above expectations

Muhamad Al Azhari & Dion Bisara reported on 24 February in The Jakarta Globe that Indonesia raised Rp 5.56 trillion ($467 million) from the sale of the country’s first retail Islamic bonds, or retail sukuk , beating the sales target due to strong demand from investors, according to the finance minister.

The government initially aimed to raise Rp 1.77 trillion through the debt paper sale, but later raised that target to Rp 3.7 trillion as demand appeared to be strengthening. A 12 % of return was offered for the bonds, higher than premium-grade bank deposit rates of about 10 percent for preferred customers.

The debt papers were sold at a par, or face value, of Rp 1 million per unit, with a minimum purchase of Rp 5 million. The sukuk has a fixed payout on the 25th of each month and matures on Feb. 25, 2012.

Hong Kong goes forward with Islamic finance

Mushtak Parker writes in Arab News on 23 February that the Hong Kong Special Administrative Region government is finalizing new tax laws which would facilitate the introduction of Islamic finance on a par with equivalent conventional products, and there is a strong possibility that the Hong Kong Airport Authority (HKAA) will issue the debut quasi-sovereign Sukuk from the island enclave during 2009.

However, Hong Kong is concerned about the effect on Islamic finance of the credit crunch and the global financial crisis, since no economy, including those in the Middle East and GCC (Gulf Cooperation Council) countries, have gone untouched. Thus it seems unavoidable that Islamic finance will slow its pace of development in the near term, "alongside growing downside risks in the global financial scene."

Deloitte sets up KL Islamic Finance Centre of Excellence

DELOITTE is setting up an Islamic Finance Centre of Excellence in Kuala Lumpur. This is Deloitte’s only such centre in the region and one of three globally, alongside London and Dubai.

India: Taurus Asset Management launches Islamic fund

India's Taurus Asset Management will launch a sharia-compliant equity fund monitored by India's Taqwaa Advisory and Shariah Investment Solutions, an independent Sharia board, to monitor its investments.

Indonesia plans regular domestic Sukuk with maturity of 5 years

Indonesia plans to issue regular domestic Sukuk Al Ijara with a maturity of 5 years or more according to the finance ministry. The currency is not yet decided.

Rumour: Dubai Islamic Investment Group may sell stake in Maybank

Malaysia's top lender, Maybank, said it was not in talks to buy Dubai Islamic Investment Group's stake in Bank Islam, a deal that would have created the largest sharia compliant bank in the Asia-Pacific region. Dubai Islamic Investment Group, which is part of Dubai Group, was interested in selling its 40 percent stake in unlisted Bank Islam to Maybank Islamic, the banking sources added. Approached to comment on whether it was selling its stake, Dubai Group said that it "is a long-term strategic investor" in Bank Islam.

EONCAP Islamic Bank Bhd is eyeing 8 % growth in financing

EONCAP Islamic Bank Bhd is eyeing an 8 % growth in financing despite the economic slowdown. The bank has deposits and financing worth RM 4.3 bn and RM 4.8 bn respectively.

Malaysia: Nomura Islamic Asset Management - strategy

Racheal Lee Mei Nyee reported on 16 February in The Edge Daily, that Nomura Islamic Asset Management Sdn Bhd plans to launch its first product by the second half of this year for the Malaysian market before venturing into the Gulf and other Asian regions, its managing director Toru Nakano said.

The company had set a rather conservative target of USD 1 bn (RM3.6 billion) worth of funds under management within five years. The conventional division currently manages more than USD 1 bn of funds, which are invested both locally and overseas. The Nomura Group had had a presence in the Middle East for 35 years, it was yet to be familiar with Islamic finance and asset management.

Malaysia: Aberdeen Islamic Asset Management - strategy

Racheal Lee Mei Nyee reported on 16 February in The Edge Daily, that Aberdeen Islamic Asset Management Sdn Bhd aims with the new licence to approach retail investors and launch funds, which it could not do under the conventional licence. The company is seeking seed funding from institutional investors first and look at retail funds only later.

Gerald Ambrose is managing director of Aberdeen Asset Management Sdn Bhd.

Islamic Securitization - The Right Way Forward?

Heiko Hesse, Andreas Jobst and Juan A. Sole published on RGEmonitor on 13 February an analysis regarding Islamic Securitization and the grown interest for Islamic finance during the financial crisis.

Islamic finance is driven by the general precept of extending religious doctrine in the shari’ah to financial agreements and transactions. Predatory lending, deteriorating underwriting standards, and a series of incentive problems between originators, arrangers, and sponsors, of which all have infested the conventional securitization process, belie fundamental Islamic principles.

The article linked in the source relates the characteristics of this form of securitization to calls for enhanced disclosure and standardization, ratings agency reforms, and better transparency of origination and underwriting practices in conventional structured finance. In particular, it assesses the potential of conflicts of interest (which became apparent in the U.S. subprime mortgage crisis) to contaminate the integrity of the securitization process if it were conducted in compliance with shari’ah principles.

Bank Islam signs MoU with Bank Muamalat Indonesia for Estate Planning

Ellina Badri reported in The Edge Daily about the memorandum of understanding between Bank Islam Malaysia Bhd and Bank Muamalat Indonesia Bhd for the distribution of Islamic trust products.

Islamic trusts involve investments made following syariah principles and asset distribution according to Islamic rules of succession. The range of Islamic trust products include will-writing and estate administration services, and waqf, or a gift of property for religious or charitable purposes.

Islamic banking law in Kazakhstan came into effect

Clare Nuttal reported on 13 February on Business News Europe that Kazakhstan launches a new commodity exchange and confirmed in the same article that the Islamic finance law came into effect in January.

AmanahRaya-JMF looks into Islamic REITs

AmanahRaya-JMF Asset Management Sdn Bhd, which currently manages RM 7.5 bn in funds, is looking at going into Islamic real estate investment trusts (REITs) in the next two or three years, says managing director/chief executive officer Sharizad Jumaat, and exclude non compliant components by 2011.

Bank Indonesia to reduce CAR for banks aiming to spin off Islamic commercial bank

Bank Indonesia plans to reduce the capital adequacy ratio (CAR) for conventional banks wishing to set up a shariah commercial bank through a spin-off from Rp 1 trillion to Rp 500 billion as of March.

The Islamic Corporation for the Development of the Private Sector (ICD), looks into establishing an Islamic bank in Indonesia as partner.

The Islamic Bank of Asia aims for expansion

The Islamic Bank of Asia, majority owned by DBS is looking for acquisition opportunities in Malaysia and Indonesia, although it is also keen on Saudi Arabia, the UAE and Kuwait. The Islamic Bank of Asia currently focuses on commercial banking, corporate finance, capital market and wealth management services. The step towards Malaysia and Indonesia targets the retail markets.

Kuwait Finance House Malaysia more than doubles paid up capital

Kuwait Finance House Malaysia said last Friday it has received a USD 300 mn capital injection from its parent, increasing the paid-up capital to USD 500 mn.

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