Deal Street Asia

Shariah compliant #Robo #Advisor ‘Algebra’ to pilot in Asia before going global

#Malaysia-based private wealth management firm Farringdon Group is all set to launch its Shariah compliant Robo Adviser 'Algebra'. A robo-advisor is an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners. Farrigdon Group CEO Stuart Yeoman said that Algebra can take minimum investments worth $4000 and the launch is planned for next month. Before going global, Farringdon is piloting the product in Asia frst. Algebra is backed by smart beta trading algorithms to derive its active equity portfolio and blends it with Sukuk bond funds to derive a risk weighted portfolio. The robo-advisor will follow basic Islamic principles. It has received the approval of Shariah Scholar Datuk Dr Daud Bakar of Amanie Advisors for its shariah investment strategy.

MAVCAP set to hit $50m first close for Meranti Fund, Elixir-partnered Islamic #Fund

Malaysia Venture Capital Management (MAVCAP) plans to announce a $50 million first close for two of its funds that will be launched this year, Asean Growth Fund and Global Islamic Economy Fund. The combined size of the two vehicles will be about $450 million. MAVCAP CEO Jamaludin Bujang said the Asean Growth Fund is $200 million vehicle, which is jointly launched with China-based Gobi Partners. This vehicle will be termed Meranti and will focus on later stage funding for technology related companies in Malaysia and Southeast Asia. In fact, MAVCAP is weighing options for the Islamic fund that is looking to invest in Shariah compliant and Halal sectors. Apart from the Asean Growth Fund and the Islamic fund, MAVCAP is also working on a clean-tech fund that will invest in companies that help reduce environmental stress. Bujang said the clean-tech fund could have a targeted corpus of anywhere between $50-$100 million.

MY Dealbook: Maxis plans $2.5b #sukuk, IDB to float bonds worth $86.6m

Maxis Broadband, a unit under telecommunications group Maxis, is planning a sukuk issuance to raise as much as MYR10 bn for acquisitions and capital expenditure. CIMB Investment Bank is the sole principal adviser and sole lead arranger for the programme, while CIMB Islamic Bank is the shariah adviser for the programme. The Islamic Development Bank (IDB) has issued a MYR350 mn ($86.6 mn) sukuk for project financing and other development activities. IDB president Ahmad Mohamed Ali said the successful issuance of sukuk in Malaysian Ringgit is a testimony to the increasing interest for sukuk.

Singapore: EthisCrowd targets $740k for real estate crowdfunding project in Jakarta

EthisCrowd.com, a Shariah compliant crowdfunding platform, is looking to raise up to S$1 million ($740,000) for a real estate crowdfunding initiative from senior executives and delegates present at the Global Islamic Finance Forum 5.0 in Kuala Lumpur next month. The funds will be raised for the Depok Dream Village in Jakarta. Founder Umar Munshi said he expects the projected returns to be 48 to 55 per cent over three to 3.5 years from a share of the development profits.

Indonesia sees rush of Islamic mutual fund products that can invest in offshore instruments

Indonesia fund management companies are readying to market Islamic/shariah-based mutual funds that will invest in offshore instruments. This follows Indonesia’s regulation, announced late last year, that allows shariah mutual funds to use at least 51 per cent of their investment components in offshore instruments such as bonds and stocks. The move is seen to allow investors an option to diversify their investments and deepen the country’s shariah mutual funds market. In addition to this, the government also allowed these funds to invest up to 100 per cent of their shariah mutual funds units in overseas bonds. With the change in regulations, a host of fund management firms have announced their plans to launch products that will invest in offshore instruments.

IFC to invest $75m in Bank Danamon Indonesia to develop Islamic trade financing

International Finance Corporation (IFC) has agreed to invest $75 million in PT Bank Danamon Indonesia Tbk (BDMN), to develop the bank’s Islamic trade financing operations. Bank Danamon is majority owned by Temasek Holdings (Private) Limited through its affiliate Fullerton Financial Holdings Ltd (67.37%) with JPMB Franklin Templeton Investment Funds holding 6.81 per cent and 25.82 per cent with the public. IFC proposes to invest up to $75 million structured as an Islamic trade financing instrument. The total facility size would be approximately $150 million including co-investment by the Bank. With this investment, IFC is targeting deepening of Islamic financing in Indonesia through new financial products and services designed to expand outreach.

Malaysia: Khazanah may offload holding in Bank Muamalat, ahead of merger

State investment fund Khazanah Nasional Bhd is expected to dispose off its entire 30 per cent interest in Bank Muamalat to major shareholder DRB-Hicom Bhd ahead of the proposed merger between Bank Muamalat and Malaysia Building Society Bhd (MBSB) materialises. There is no point holding on to the stake since its holdings would diminish in the merged entity. Moreover, it would not be a problem for DRB-Hicom which already owns 70 per cent interest in Bank Muamalat to purchase Khazanah’s interest. Khazanah managing director Azman Mokhtar had told reporters that it would wait for the outcome of the merger talks before deciding what to do with its stake.

China’s realty player Country Garden plans $340m sukuk bond issue in Malaysia

Chinese property developer Country Garden Holdings Company Ltd plans to issue up to MYR1.5 billion ($340 million) of medium-term sukuk, through its Malaysian subsidiary, to finance the latter’s present and future investments. The issuer, Country Garden Real Estate Sdn Bhd, plans to commence marketing of the first tranche of medium term notes (MTN) to qualified investors. The MTN will not be offered to the general public and will not be listed on any securities exchange, Country Garden said. The mode of issuance, size and coupon rate of the proposed issue will be determined prior to distribution, and is subject to market conditions and investors’ interest. CIMB Investment Bank Berhad was appointed as the lead arranger and lead manager.

MBSB to become full-fledged Islamic bank, via merger with Bank Muamalat

Malaysia Building Society Bhd (MBSB) is on track to obtaining a full-fledged Islamic banking licence, that will come together through a merger with Bank Muamalat Malaysia Bhd. Plans were being laid out to realise MBSB’s goal to get a full-fledged Islamic banking licence. This comes seven months after news-grabbing three-way merger between MBSB, CIMB Group Holdings Bhd and RHB Capital Bhd fell through in January. In May this year, MBSB was reportedly eyeing Kuwait Finance House (M) Bhd as an option for a merger exercise. One of MBSB’s setbacks as a non-conventional bank is its inability to tap low-cost funds from the money market that are accessible to conventional banks.

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