Malaysia’s Islamic insurers are considering a move into Europe by targeting the continent’s growing Muslim population. Amat Taap Manshor, chief of the Financial Accreditation Agency (FAA), said it may not happen right away but a lot of Islamic insurers are looking to target the Muslim middle classes in the UK, Germany and France. Manshor made the comments during the signing of a memorandum of collaboration between the FAA and the British accreditation council (BAC). The partnership hopes to offer financial services globally accredited courses in Islamic finance.
#Malaysia Building Society's (MBSB) move to strengthen its presence in Islamic banking is in line with majority shareholder Employees Provident Fund’s (EPF) endeavour. MBSB president Datuk Ahmad Zaini Othman said being a prominent Islamic player would help the firm’s growth plan. MBSB aspires to graduate from a non-lender into a full-fledged Islamic bank to increase its competitiveness. For the first six months ended June, MBSB’s net profit dropped 53.4% to RM97.8 million, despite an 11.6% jump in revenue to RM1.6 billion. The first-half results were below estimates, with operating income declining 1.8% as management continued to focus on corporate loans portfolio in place of the higher-yielding personal financing portfolio.
Dr. Bambang Permadi Soemantri Brodjonegoro, Indonesia’s former Finance Minister and current Minister of National Development Planning, discusses the recent tax amnesty legislation and current economic prospects for Indonesia. Hosting the recent 12th World Islamic Economic Forum (WIEF) in Jakarta aims to promote Indonesia to the Muslim community, sending a message that Indonesia is a reliable economy with a lot of potential. The WIEF tries to develop Islamic finance that is more inclusive. Indonesia wants to focus on Islamic microfinance and on Muslim-friendly tourism. Beyond tourism, Muslim fashion is a sector that already has a huge market and will be increasingly important for Indonesia.
The Indonesian government has launched a national master plan to develop its Islamic finance industry. Indonesian Islamic banks hold roughly 5% of total banking assets, compared with more than 20% in neighbouring Malaysia. According to Farrukh Raza, managing director of IFAAS, an Islamic finance consultancy which designed the 10-year master plan, the government would increase its use of Islamic debt instruments to as much as 50% of total issuance in 10 years time. Indonesia's pilgrims' fund would also see the establishment of a dedicated asset management arm to implement a more rigorous investment policy and attract external fund managers.
#Malaysia-based International Islamic Liquidity Management Corp (IILM) has lengthened maturities in its Islamic bond programme by auctioning $500 million of four-month sukuk. Previously, the IILM has issued three-month and six-month papers, which were introduced to manage short-term funding needs. The IILM sold the four-month sukuk at a profit rate of 1.37389%, attracting 17 bids worth a combined $1.3 billion. It also sold $840 million of three-month sukuk at a profit rate of 1.24411%, attracting orders of $1.6 billion via 14 bids. The issues were bought by 11 primary dealer banks.
The central bank of #Malaysia plans to undertake an in-depth review of important organisations to re-energise the Islamic finance talent development landscape. Bank Negara Malaysia (BNM) Governor Datuk Muhammad Ibrahim said over the years, the central bank had established specialised institutions to enrich the talent ecosystem. These include the International Centre for Education in Islamic Finance, International Shari’ah Research Academy (ISRA), Islamic Banking and Finance Institute Malaysia (IBFIM), the Chartered Institute of Islamic Finance Professionals and the Association of Shariah Advisors in Islamic Finance Malaysia. Ibrahim noted that the new Educator’s Manual on Shariah Standards on Murabahah has several benefits for universities and stakeholders. One benefit is strategising talent deployment, while another area is the reconfiguration of academic programme to nurture talent with enhanced employability.
In #Malaysia Bank Negara governor Datuk Muhammad Ibrahim said Islamic banking assets made up 27% of the total banking system, surpassing Bank Negara’s Financial Sector Masterplan. He said that there were 27 takaful players offering more than 100 financial products now compared with fewer than four Islamic banks and takaful players before year 2000. He added that the penetration rate for takaful now stood at 14.8% of the population, indicating growing acceptance of takaful products. On the launch of the Educator’s Manual on Shariah Standard Murabahah, Muhammad said that the manual was aimed to act as a comprehensive teaching guide to enhance the Islamic finance syllabus. It was jointly developed by Bank Negara in collaboration with the International Shari’ah Research Academy for Islamic Finance and IBFIM.
Brunei is strongly encouraging the growth of the Islamic finance industry. According to the Thomson Reuters Islamic Finance Development Indicator, Brunei was recently ranked 10th out of 92 countries. Yusof bin Haji Abdul Rahman, Managing Director of Autoriti Monetari Brunei Darussalam (AMBD), noted that the Brunei Government Sukuk Al-Ijarah Programme has been consistently issued since 2006 as a benchmark. He said public–private sector dialogue has been increased to raise awareness of the benefits of takaful products. He said he believes that Islamic finance can be a solution to support economic growth and promote long-lasting financial stability.
The race to tap an US$11.5 trillion pool of wealth held by Muslim individuals, institutions and governments is intensifying. The asset management units of Malaysia's RHB Bank and Indonesia's PT Bank Mandiri plan new Islamic funds. RHB Group Asset, which oversees 54 billion ringgit ($13.5 billion), will offer new Islamic funds in Malaysia and may make some of them available in Brunei, Indonesia, Singapore and the Middle East. The Indonesian Mandiri Manajemen’s plan for more Shariah investment vehicles comes after the company’s global Islamic stock fund drew $10 million from institutional investors when it was set up on Aug. 4. According to Malaysia International Islamic Financial Centre, the global Islamic asset management industry is forecast to grow to $77 billion by 2019 from $58 billion at the end of 2015.
Bank Negara Malaysia (BNM) launched the Educator's Manual on Shariah standards and operational requirements in accordance with the Murabahah principle. BNM Governor Datuk Muhammad Ibrahim said the manual serves as an important material towards enhancing the quality of Islamic finance education. The manual was developed by BNM together with the International Shari'ah Research Academy for lslamic Finance (ISRA) and the Islamic Banking and Finance Institute Malaysia (IBFIM). A panel of 20 experts in various fields contributed to its content.
In #Malaysia islamic banking assets now stand at 27% of the total banking system, surpassing the targeted 20% under Bank Negara Malaysia’s financial sector master plan. Bank Negara governor Datuk Muhammad Ibrahim said there were now 27 players offering more than 100 financial products compared with fewer than four Islamic banks and takaful players before 2000. The Educator’s Manual on Shariah and Practical Operational Standards was launched on Tuesday to enhance the quality of education. Of the 14 syariah standards that are being developed by Bank Negara, Murabahah is the first series in the educator’s manual. The manual for other contracts will be developed gradually.
The shares of Amana Takaful Life will be listed on the Colombo Stock Exchange on Thursday. The initial public offering of Amana Takaful Life by way of an offer for sale of 75 million rupees was oversubscribed at its opening day on 21st July, 2016. The company offered 50 million ordinary voting shares at 1.50 rupees per share which represents 10% of its total stake.
The Maldives is working towards enlarging its Islamic finance industry to diversify its economy away from tourism. The country aims to become an investment hub for South Asia and centre for the halal industry in the region. To that end, President Yameen Abdul Gayyoom’s government has developed a roadmap to expand Islamic financial services throughout the archipelago. Last year, the Ministry of Economic Development started offering Islamic microfinancing through the Bank of Maldives, and earlier in 2016, the government launched Hazana Maldives, a special-purpose vehicle for the further development of Islamic finance. It also created a Shariah advisory board and laid the regulatory framework for sukuk investment.
Fitch Ratings #Indonesia has assigned National Long-Term Ratings of 'AAA(idn)' to Indosat Ooredoo's IDR 3,172 bn senior unsecured bonds and IDR 288 bn sukuk ijarah issues. The issues are launched from Indosat Ooredoo's IDR 9 trn bond programme and IDR 1 trn sukuk ijarah programme. Indosat Ooredoo will use the issue proceeds to refinance its existing rupiah debt, and to fund licence fees. The sukuk rating is at the same level as Indosat Ooredoo's National Long-Term Rating of 'AAA(idn)'. Fitch's rating for the certificates reflects the agency's belief that Indosat Ooredoo would stand behind its obligations.
Bank Mandiri, Indonesia's biggest bank by assets, is set to meet the 300 million ringgit ($74 million) capital requirement to operate as a full banking branch in Malaysia. Financial authorities from Indonesia and Malaysia signed a bilateral agreement allowing greater access for lenders from both countries to fully operate in the respective jurisdictions. Bank Mandiri will open several new offices and a string of ATMs in the country, though it will not specifically target the retail banking market in Malaysia. Mandiri had already opened one subsidiary in Malaysia called Mandiri International Remittance whose service is limited to sending money to and from Indonesia. When it has a full branch in Malaysia, it will also be able to offer credit services.
Tun Abdullah Badawi, the former Prime Minister of #Malaysia, has launched the Waqf (Islamic Endowment) crowdfunding platform or WaqfWorld. The new platform was announced at the 12th World Islamic Economic Foundation Forum (WIEF) held in Jakarta last week. The platform was developed in partnership with EthisVentures.com. Founding patron, Tun Abdullah Ahmad Badawi saw the potential of Waqf Crowdfunding to develop the whole community of Muslims. WaqfWorld.org does not charge beneficiaries or users any fees. The platform is completely free during the initial phase. Operational costs will be partially borne by voluntary contributions, and other resources provided by Ethis Ventures.
Technology financier Malaysia Debt Ventures Bhd (MDV) plans to raise RM1bil via sukuk in the fourth quarter of this year. The planned issuance is aimed to increase MDV's lending ability including to start-ups. CEO Datuk Md Zubir Ansori Yahaya said the new sukuk issuance would likely have a government-guarantee status. Md Zubir said the funds from the new sukuk, which will likely have a 10-15 year tenure, could be rolled out and replenished until end-2017. To-date, MDV has approved a total of RM9.8bil in financing support to 700 innovation, technology and information technology-based companies including Iris Corp, Puncak Semangat and MOL Global Inc.
President of the #Philippines Rody Duterte announced the need to help the people of the Autonomous Region in Muslim Mindanao (ARMM). Al-Amanah Islamic Investment Bank of the Philippines (AAIIBP) is the only bank authorized to conduct Islamic Banking business in the country. The AAIIBP total Assets for the month of July 2016 is P785.66 million, a decrease from previous month’s total assets of P795.05 million. In comparison to the same period last year, there is an increase of P6.58 million in total assets largely due to higher deposit levels in 2016. According to lawyer Arifa Ala, there is a significant untapped market opportunity for banks in the Philippines, because only about 30% of Filipino adults have deposit accounts at a financial institution.
Inflows in debt vehicles issued by Muslim Southeast Asian nations have increased in the recent past. Malaysia and Indonesia are greatly benefiting from their current monetary easing policies, relaxed tax policies and government infrastructure spending programs. The Pan-Borneo Highway project adds to other sukuk issuances, among them a $1.3bn-offer by Sarawak Hidro, the state-owned developer of Malaysia’s biggest hydropower project, also on Borneo Island. Other infrastructure sukuk in the queue are a $440mn-issuance for the bridge connecting Peninsular Malaysia with Penang island and a $892mn-issuance for a highway network. Indonesia’s government is also enlarging the scope of sukuk-backed investment in roads and railways. However, the state budget is only capable of contributing 30%, which means that a large number of future issuances can be expected, with its uptake spurred by generous tax incentives.
Executives of Indonesian and Malaysian stock markets signed on Tuesday a Memorandum of Understanding (MoU) on the establishment of a World Sharia Stock Market Center. Signing of the document was conducted by Indonesia Stock Exchange President Director Tito Sulistio and his Malaysian counterpart Tajuddin Bin Atan. The planned center aims to develop Sharia products and portfolios for stock markets, but also to train human resources to become competent, professional and skillful persons in the industry. Global Sharia financial market was estimated to expand to USD 3.24 trillion by 2020.