Asia

Bank Islam MD says unlikely to extend contract

Bank Islam's managing director Datuk Seri Zukri Samat said he would not extend his contract when his tenure ends in June this year. When asked on his successor, Zukri said there was still plenty of time to search for a successor since it was only January. On Bank Islam Visa Infinite MPN credit card-i, he said it was introduced in response to Bank Negara’s call for a cashless society. He said the collaboration with MPN was the bank’s continuous cooperation with the academic institutions starting with the introduction of the UniDebit card in 2012. Meanwhile, MPN chairman Professor Tan Sri Zakri Abu Hamid welcomed the strategic cooperation to strengthen the corporate image of both parties.

Fitch: #Malaysia's #takaful continues to enjoy higher growth than conventional peers

According to Fitch Ratings, Malaysia's takaful sector continues to enjoy higher growth than the conventional sector. This growth is driven by a low base, stable domestic consumption and increasing consumer awareness. The rating agency said that regulatory pressure would drive sector consolidation in the short term. As takaful operators realign their strategic focus and gradually retain more risks, Fitch expects some bottom-line volatility in the short term. For the first half of 2016 (1H2016), family takaful grew by 9.8%, while general takaful grew by 5.8%. This compared to 8.2% growth in conventional life and 2.6% in general insurance.

Sabana Shariah Compliant #REIT Is #Singapore’s Worst-Performing REIT Over The Past Year: What Investors Should Know About Its Challenges

There are 38 real estate investment trusts (REITs) in Singapore’s stock market. The REIT with the worst performance over the last 12 months is Sabana Shariah Compliant REIT (SGX: M1GU), whose units have fallen by 49% in price to S$0.36 currently. Sabana REIT is unique for being the world’s first Shariah-compliant REIT. In the third quarter of 2016 Sabana saw its gross revenue decline by 9.7% to S$23.0 million while its net property income shrank by 24% to S$13.9 million. Although the REIT’s portfolio occupancy rate managed to step up from 88.8% in the second quarter of 2016 to 89.2%, the number is still lower than the 91.7% seen a year ago. Market researcher Knight Frank projected a decline in industrial rents in Singapore of 6% to 8% in the fourth quarter of 2016. Put another way, Sabana REIT’s business environment is in a condition of low demand and oversupply.

#Fund to spur foreign investment in Islamic finance

#Malaysia’s securities regulator has proposed establishing a fund to invest in the country’s Islamic finance funds and make them more attractive to institutional and foreign investors. The proposed fund is part of an Islamic fund and wealth management blueprint launched on Thursday. It would invest in multi-currency Islamic investment products managed by Malaysian-based asset managers. The fund could address challenges that Islamic funds have faced so far. Few Malaysian-managed funds are offered overseas but this is starting to change. CIMB Islamic Asset Management, for example, this week launched an Ireland-domiciled dollar-denominated sukuk fund. The Employees Provident Fund is launching a RM111.45 billion shariah-compliant retirement fund this month, which could serve as a boon to asset managers in the field.

SC unveils five-year blueprint to further strengthen #Malaysia as a leading Islamic investment hub

The Securities Commission Malaysia (SC) has launched a five-year Islamic Fund and Wealth Management Blueprint designed to drive further development and growth of Malaysia's Islamic capital market. The Blueprint aims to establish the country as a leading international centre for Islamic fund and wealth management. It was launched by Datuk Johari Abdul Ghani, Second Finance Minister of Malaysia, on behalf of Prime Minister Dato’ Sri Mohd Najib Tun Razak, at the International Fund Forum 2017. To be implemented on a phased approach, initial work programmes will include the formulation of a framework for SRI funds, the setting up of a global centre for Islamic capital market and the introduction of a digital investment services framework.

Major #Fintech #Achievements in Islamic Finance in 2016

The year 2016 records quite remarkable achievements in terms of financial technology (fintech). The Investment Account Platform (IAP), Malaysia’s first multi-bank platform for financial intermediation in the Islamic financial system, was launched on the 17th February 2016. The IAP serves as a central marketplace to finance small and medium enterprises (SMEs) with initial funds of RM 150 million. Eight Islamic Crowdfunding Platform operators from across the globe clicked together to form Islamic Fintech Alliance (IFT Alliance) and launched it on the 1st April 2016. Then, on the 26th September 2016, New York-based Wahed Invest launched Wahed, the world’s first automated Islamic investment platform. Two months later, the Kuala Lumpur-based Faringdon Group announced that it would be launching Asia’s first Shariah compliant Robo Advisor. The online tool called Algebra will provide automated portfolio management advice. Further progress of these initiatives and new innovative entrants will position 2017 for more excitements.

Peza sets #investment roadshows next month

The #Philippine Economic Zone Authority (PEZA) has scheduled investment roadshows in the Middle East to attract investors to explore the Philippine market. According to Peza director general Charito Plaza, this will be in preparation for President Rodrigo Duterte’s plan to visit the Middle East on Feb. 26 to March 3. Plaza mentioned that the Department of Foreign Affairs, Department of Trade and Industry, Philippine Chamber of Commerce and Industry, local government officials, and economic zone developers would join the investment promotion agency in its roadshow in the Middle East. PEZA recently held a seminar on sukuk to help local companies understand doing business with Middle East-based firms. Plaza noted the government aimed to expand the presence of Islamic banks in the country to facilitate investments.

SCC ups #Sukuk scheme to RM3.5 billion

Sabah Credit Corporation (SCC) increased the size of its Sukuk Musharakah programme from RM1.5 billion to RM3.5 billion. According to CEO Datuk Vincent Pung, the move will allow SCC to consolidate outstanding Sukuk issuance and generate an additional RM1 billion for the corporation to plan its future loans growth. Pung also announced i-Cash, a personal loan facility, offering borrowers simplified and online loan processing and the flexibility of drawing the loan. Finance Minister Datuk Seri Musa Aman noted that SCC had anticipated a significant drop in profits of RM16 million initially to RM54 million for the year 2016, but instead reported a beyond expectation pre-audited profit of over RM60 million as of December 2016. He said the corporation has also donated over RM23 million through more than 150 Corporate Social Responsibility projects such as rural hostels, orphanages, half-way homes and centres for single mothers.

Massive reshuffle in Islami Bank top positions

Islami Bank Bangladesh has undergone abrupt, major changes in its three top positions - chairman, vice chairman and managing director. Arastoo Khan, the former chairman of Commerce Bank has now become chairman of Islami Bank, replacing incumbent Mustafa Anowar. As a representative of Ibn Sina run by Bangladesh Jamaat-e-Islami leaders, Mustafa Anowar was serving as the chairman of the bank. He also resigned from the post of director as well as from the post in the bank’s foundation. The board of directors also replaced the bank’s managing director (MD) Mohammad Abdul Mannan by Union Bank’s MD Abdul Hamid Mia. Islami Bank Bangladesh has 307 branches including 57 AD branches and three offshore banking units as well as 13,229 staff members, as of December 2015.

MBSB gets nod for talks on proposed #merger with Asian Finance Bank

#Malaysia Building Society Bhd (MBSB) has received Bank Negara’s approval for talks on a proposed merger with Asian Finance Bank (AFB). MBSB will soon start negotiations with the existing Middle Eastern shareholders of AFB, namely Qatar Islamic Bank (66.67%), RUSB Investment Bank (16.67%), Tadhamon International Islamic Bank (10%) and Financial Assets Bahrain (6.67%), for the merger. The negotiations are to be completed within the next six months. For the nine months ended Sept 30, 2016, AFB reported a net profit of RM4.54 million, an 18.8% drop compared with RM5.58 million in the same period last year. MBSB has a goal to become an Islamic financial institution by 2020 through merger with an Islamic lender. It centres his business efforts on six areas, namely, business focus, right pricing, asset quality, cost cutting, retail collection and information technology initiatives.

SGX's kilobar #gold futures contract gets Shariah-compliant status

The #Singapore Kilobar Gold Contract of Singapore Exchange (SGX) has become the world's first Shariah-compliant gold futures contract. SGX said this endorsement by Islamic scholars on its physically settled futures contract unlocks a new investment and risk management option. The Singapore Kilobar Gold Contract seeks to serve as a transparent and centralised Asian price-discovery platform for the gold market. William Chin, head of metals and bulk commodities at SGX, said the move strengthens Singapore's position as an international centre for Islamic finance. Albert Cheng, CEO of the Singapore Bullion Market Association, said the Shariah-compliant SGX contract will be attractive to new customers in the region, particularly Indonesia and Malaysia.

Maybank sets up RM10 billion #sukuk programme

Malayan Banking (Maybank) has established a sukuk programme of up to RM10 billion in nominal value under the syariah principle of Murabahah. According to Maybank's announcement, the sukuk programme will provide the bank the flexibility to raise funds for its Islamic financial instruments and its business activities. The sukuk programme has been assigned a long-term rating of 'AAA' for issuances of senior sukuk Murabahah and 'AA1' for issuances of subordinated sukuk Murabahah by RAM Rating Services. Maybank IB is the principal adviser, lead arranger and manager, and book runner for the programme.

#Indonesia looks to Islamic schools to spur Sharia banking

In an effort to boost the industry, Bank Indonesia has decided to work with Islamic boarding schools known as pesantren. Anwar Basori, Bank Indonesia's head of Islamic Finance and Economy, said there is a lot of potential in the 27,000 pesantren, which have about 3.6 million students. The central bank said it is finalizing a roadmap for the program under which it will work with the Religious Affairs Ministry to help the business units of pesantren to become financially independent. The schools operate in various business areas, including mini-markets and cattle farms, and provide extracurricular entrepreneurship and Islamic finance education to students. Anwar said that the roadmap would be implemented in early 2017, starting with a pilot project.

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.

#Malaysia-#Bahrain Should Lead World's Islamic #Fintech

Malaysia and Bahrain should take the lead in exploring the potential of introducing the world’s first Islamic financial technology (fintech). According to Bahrain Economic Development Board (EDB) Director David Parker, the favourable initiatives undertaken by regulators from both countries provide a positive edge for Islamic fintech. In Malaysia, Bank Negara Malaysia Governor, Datuk Muhammad Ibrahim said a regulatory framework to enable the adoption of fintech would likely be announced by year-end. During the 23rd Annual World Islamic Banking Conference held here, Bahrain Central Bank Governor Rasheed Mohammed Al Maraj hinted that the bank would soon issue regulations to facilitate fintech solutions. Bahrain Islamic Bank CEO Hassan Amin Jarrar described the need to introduce Islamic fintech to the world Islamic financial market as "critical" and if Malaysia and Bahrain do not take the first step, other big countries will snatch away the advantages.

Online #gold platform HelloGold endorsed as Shariah-compliant

#Malaysian fintech HelloGold is the first online gold platform to be endorsed as Shariah compliant by the Shariah Supervisory Board of Amanie Advisors. CEO Robin Lee showcased the savings platform at the global launch of the Shariah Standard on Gold at the World Islamic Banking Conference. According to Lee, with this platform everyone can buy gold and users are able to buy investment grade gold easily through their smartphones. He added that gold is a particularly good safe haven investment against foreign exchange risk and market shocks. Over the last 12 months, gold has risen by 17% against the Malaysian ringgit, 10% against the Thai baht, 9% against the Indonesian rupiah, 17% against the Philippine peso and 12% against the Singapore dollar. The HelloGold app is now available for use in Malaysia and is currently available on Google Play.

#Islamic #banks slowly #embrace #green #finance – survey

Islamic banks are gradually embracing socially responsible finance, from renewable energy to microfinance efforts, helping unlock new funding sources for environmentally-friendly projects, an industry survey shows. The two sectors have developed separately from each other, but green projects could benefit from tapping Islamic banks in countries like the United Arab Emirates and Malaysia, where they now hold a quarter of total banking assets.
Around two-thirds of financing in Saudi Arabia follows Islamic principles, which forbid investing in gambling, tobacco and alcohol. This resembles the screening methodology used by ethical funds in Western markets. Green finance is increasingly important for Islamic banks seeking to differentiate themselves from their conventional peers, the Bahrain-based General Council for Islamic Banks and Financial Institutions (CIBAFI) said in a report.

Panel okays Sharia banks

The #Philippines' House committee on banks and financial intermediaries has approved the measures that would pave the way for the expansion of Islamic banking in the country. The new House Bill amends the Philippine’s lone Islamic bank, the Al-Amanah Islamic Investment Bank to regulate and organize an expanded Islamic banking system in the Philippines. Former president Gloria Macapagal Arroyo said the enactment of the measure was very timely as this would help the country’ growth inclusive and sustainable. The consolidated proposal will make the Al-Amanah independent from the Development Bank of the Philippines, be a universal bank with initial paid up capitalization of P10 billion and will be the first in the country to fully engage in Islamic banking that can issue sukuk.

Mirae Asset Global Investments Launches New Sharia-Compliant Asian Equity UCITS #Fund

Mirae Asset Global Investments has launched its inaugural sharia-compliant Asian equities fund that will invest in sharia-compliant companies in Asia. Mirae established the new UCITS-compliant fund to address demand from Islamic investors in the Middle East and Southeast Asia and thereby also widen its client base in the region. The new fund will be domiciled in Luxembourg as part of Mirae’s Global Discovery Fund SICAV and will be registered in a number of selected countries. Mirae Asset Financial Group was founded in 1997 and has expanded in recent years to include a global asset management capability with offices in 12 countries on 5 continents.

#Malaysia: Solar #Sukuk Lights The Way To Alternative Funding Sources: Australia, Indonesia And Malaysia Working Together

SGI-Mitabu, a joint venture of two Australian solar companies, The Solar Guys International and Mitabu Australia, has revived its plans to fund its Indonesian 250 megawatt solar project with Islamic compliant funding. SGI-Mitabu will offer its sukuk in Labuan, Malaysia. SGI-Mitabu's sukuk issue is set to be the first Islamic finance offering by an Australian corporate and could provide a useful example of alternative sources of capital to other companies. Companies seeking alternative sources of funding may wish to consider whether a form of Islamic finance would be suitable for their next project, even if they have to look outside their own jurisdiction to make it happen.

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