Malaysia

#Malaysia to retain position as world's premier #sukuk issuer

Malaysia will remain the market leader in global sukuk issuance despite recent delays and cancellations of mega projects. CIMB Islamic Bank CEO Rafe Haneef said the delays of some mega projects would have some impact sukuk deals, but it is still business as usual for Malaysia. Last year, Malaysia had issuances of over US$50 billion. According to Moody’s Investor Services, Malaysia continues to remain the world’s largest sukuk with an estimated 44% of total sovereign sukuk outstanding in 2017. Issuance grew 17% in 2017 to some US$100 billion. CIMB Investment Bank topped Bloomberg’s Underwriter League Table for ringgit bonds for 12 years running. Going forward, Rafe expects issuances will come from both the infrastructure and corporate space.

ESG podcast: Securities Commission #Malaysia outlines plans for green Islamic finance (part 2)

In this podcast Zainal Izlan Zainal Abidin of Securities Commission Malaysia speaks about the country's strategy for socially responsible and sharia-compliant investing. He talks about the challenges in making Malaysia a global Islamic finance centre. He sees great potential for Malaysia as it rolls out new products, such as a sukuk ETF. Zainal believes the gradual harmonizing of Sharia definitions will fuel more cross-border transactions between Malaysia and the Middle East.

Ali Allawala appointed CEO of #Malaysia’s Standard Chartered Bank Islamic unit

Pakistani banker Ali Allawala has been appointed as the chief executive officer of the Islamic Unit of Standard Chartered Bank Malaysia. Ali Allawala possesses over 22 years of experience in retail banking, both within conventional and Islamic banking. He joined Standard Chartered Bank Pakistan in 2012 and had previously worked for Citibank and Samba Financial Group. He was named "Best Islamic Consumer Banker in Pakistan 2015" by the Islamic Finance Awards. Mr. Allawala has extensive multi-product experience in business development, product management, distribution, digital banking and marketing.

Matrix Concepts, #Indonesian consortium to jointly develop Islamic financial district in Jakarta

Malaysian property developer Matrix Concepts is teaming up with an Indonesian consortium to jointly develop an Islamic financial district in Jakarta. Matrix entered into a memorandum of understanding (MoU) with Bangun Kosambi Sukses (BKS) and Nikko Sekuritas Indonesia (NSI) for the joint development dubbed PIK 2 Sedayu Indo City. Matrix said the proposed development was initiated by the Indonesian government in its quest to position itself as an Islamic financial hub. PIK 2 Sedayu Indo City will encompass 1,000ha of land complete with residential houses, apartments, shopping centres, a light rail transit system, and a stadium.

Green #sukuk creates ripples on prominent environmental concerns

According to Securities Commission Malaysia (SC) deputy CEO Datuk Zainal Izlan Zainal Abidin, the world will need up to US$90 trillion (RM360 trillion) worth of investments for infrastructure by 2030. This presents a significant opportunity for green finance and green sukuk to be part of the mainstream investment for the financing solutions. In July 2017, SC, Bank Negara Malaysia and the World Bank Group established the country’s first green sukuk. Green sukuk has become the trend that has received support from investors and regulators on a global scale. NewParadigm Capital Markets Managing Director Charanjeev Singh says more green sukuk issuances are expected to take up the Islamic finance space as Malaysia continues to be the catalyst for Islamic bonds. So far, the focus has been big government-owned companies. The next level of development would be to facilitate the middle- market or the mid-sized companies, and not necessarily the government- owned or government-linked, but the A or AA ratings.

#Malaysia should look beyond ringgit to draw Chinese to #sukuk market

Malaysia is one of the largest markets for Islamic finance. According to Mohieddine Kronfol, chief investment officer at Franklin Templeton Investments, Malaysia's sukuk market could attract Chinese companies if there were more foreign currency-denominated issues. He said Malaysia has attracted foreign companies to issue sukuk, but they were predominantly in ringgit and largely domestically bought.Mohieddine said there should be more transactions in international currencies like the U.S. dollar, and a currency regime or some central bank support that facilitates that. Franklin Templeton Investments projects global sukuk growth at 15-20% this year on the back of stable oil prices, better growth outlook in markets that issue sukuks and sustained demand for Islamic finance.

Islamic Equity Class Should Explore Solutions To Stay Competitive - Sultan Nazrin

According to the Sultan of Perak, Sultan Nazrin Shah, the Islamic equity asset class needs to explore solutions and achieve critical mass volume in order to remain competitive. He delivered his keynote speech at the Franklin Templeton Investments 2018 Islamic Forum in Kuala Lumpur. He believes that Islamic finance must embrace the era of disruptive innovation, with a continued strong focus on product innovation. The global asset management landscape had been pushed to embrace new online investment platforms and failure to keep up with these changing structural dynamics could put the industry at an even greater disadvantage than at present. He said that Islamic investors could also capitalise on the emerging "green" or environmentally-friendly finance.

Exclusive - #Malaysia's Maybank prepares to spin off and list #insurance unit: sources

Malayan Banking (Maybank) is preparing to spin off and list its Etiqa insurance arm on the local stock exchange. Etiqa operates in Malaysia, Singapore, the Philippines and Indonesia and is estimated to be worth at least $1 billion. As part of the transaction, Maybank’s investors are expected to receive shares in the insurance company in proportion to their existing holding in the bank. Etiqa provides life and general insurance as well as family and general takaful. In 2017 Eitqa reported a record revenue of 6.2 billion ringgit ($1.6 billion). Profit before tax rose 18.5% to 1 billion ringgit last year. In March, Etiqa said it maintained its top position in Malaysia’s general insurance and general takaful segment with an 11.8% market share. It was ranked fourth in the life and family segment, with an 8.9% market share.

MBSB starts afresh as a full-fledged Islamic bank

MBSB Bank, the result of a merger between Malaysia Building Society and Asian Finance Bank, starts afresh as a full-fledged Islamic bank. According to group CEO Datuk Seri Ahmad Zaini Othman, the bank intends to differentiate itself in the area of transactional banking, as well as in digital capabilities. One of the key targets in MBSB Bank’s three-year business plan is to have fee-based income account for at least 25% of its total income by the end of 2020. The bank hopes that its approach towards customers will also set it apart from other lenders. MBSB Bank is starting out with total assets of RM43.7 billion, making it the second largest standalone Islamic bank after Bank Islam Malaysia (RM57.7 billion). Personal financing constitutes the biggest portion of the bank's gross financing and is extended mainly to civil servants. MBSB plans to make a stronger push in the industrial hire purchase segment, which involves SME financing. Zaini plans to offer a lot more products and services for SMEs, especially in the area of current accounts.

Allianz still keen to acquire #takaful business

Despite a failed merger with HSBC Amanah Takaful a year ago, Allianz Malaysia is still keen to acquire a takaful business. According to Allianz CEO Zakri Khir, there is bright takaful business growth potential because the penetration rate in Malaysia is just 15%. Allianz Malaysia has recently sealed a partnership with insuretech start-up PolicyStreet to offer potential clients to purchase insurance policies online. Four Allianz digital products will be offered on PolicyStreet’s digital platform namely Enhanced Road Warrior, Smart Home Cover, Allianz Travel Care and Allianz Flight Care. In 2017, Allianz Malaysia's profits fell 7.7% to RM287.96 million from RM312.13 million on the back of 2.6% rise in revenue from RM4.68 billion to RM4.8 billion. Zakri said Allianz Malaysia was impacted by Bank Negara's detariffication of motor and fire insurances from July 1 2017.

Maybank Islamic to grow trade financing biz

Malaysian Islamic banks are boosting their trade financing market share with various measures. Maybank Islamic CEO Mohamed Rafique Merican said the bank intended to grow its trade facilities in line with growing demand for Islamic finance in Malaysia. Mohamed Rafique was speaking to reporters after a forum on "Islamic Trade Finance: Revitalising Trade and Unlocking New Potential". He said a lot more could be done to boost Islamic trade facilities, which stood at 1.5% out of US$50 billion. RHB Islamic Bank CEO Datuk Adissadikin Ali said Islamic banks would need to collaborate with the financial technology players to provide e-commerce trade financing. He added that RHB Islamic Bank was developing an e-commerce trade financing platform to enable companies to boost their working capital and the platform was likely to be implemented next year.

#Malaysia can be Islamic #fintech leader, says Fitch Group unit

According to research agency BMI, Malaysia has the potential to be a world leader in Islamic financial technology (fintech). The research firm said Malaysia’s Islamic banking sector was worth US$202 billion last year, while its Islamic loans also more than doubled to 30.2% the same year, compared to just 7.8% a decade ago. BMI noted Malaysia has a developed infrastructure, an increasingly affluent and tech-savvy population, and high mobile and broadband penetration rates coupled with fast internet speeds. The Memorandum of Understanding between MIMOS and the International Center for Education In Islamic Finance (INCEIF) has laid down the foundation for the development of Islamic fintech in Malaysia.

#Malaysia remains lead in Islamic finance

Malaysia has great potential to broaden its market share and strengthen its leadership in Islamic finance. According to the latest report by the Malaysia International Islamic Financial Centre, Asia’s Islamic financial assets amounted to US$528.7 billion (RM2.05 trillion), or 26% of the world’s Shariah-compliant financial assets as at end-2017. Malaysia continued to be the main driver for both sukuk outstanding and issuance for the year, with a market share of 51% and 36.2% respectively as at end-2017. The country also led in the Islamic wealth management industry with US$28.3 billion (36.5% global share). It also ranked first in terms of number of funds with a total of 394 funds and 27.9% global share, followed by Pakistan with 147 funds and Indonesia with 143. In the banking sector, Malaysia ranked third globally after Iran and Saudi Arabia with a total Islamic banking assets of US$204.4 billion as at end-2017.

Syed Alwi is Agrobank’s new CEO

Agrobank has appointed Syed Alwi Mohamed Sultan as its new president and CEO. The appointment has received approval from Bank Negara Malaysia and the Ministry of Finance. Previously, he had held several senior management positions with various banks such as Bank Muamalat Malaysia, BNP Paribas, Standard Chartered Saadiq, The Islamic Bank of Asia and HL Bank Singapore. Syed Alwi has a bachelor’s degree in Accounting and a first-class master of business administration in Islamic finance from the International Islamic University of Malaysia. Agrobank became a full-fledged Islamic bank in 2015. It provides Shariah-compliant banking products and funding to cater for the halal food industry and agriculture-related activities.

Public Mutual launches e-Islamic flexi allocation #fund

Public Mutual has on Tuesday launched an e-series fund called Public e-Islamic Flexi Allocation Fund (PeIFAF). The fund's objective is to achieve capital growth over the medium to long-term by investing up to 98% of its net asset value in Shariah-compliant equities or sukuk. Public Mutual CEO Yeoh Kim Hong said PeIFAF has a flexible fund mandate that enables the fund managers to capitalise on investment opportunities. The minimum initial and additional investment amount is only RM100 and the sales charge is up to 3.75%. The initial issue price for PeIFAF is 25 sen per unit during the 21-day initial offer period from Tuesday to April 23. To coincide with the launch of this fund, it is holding a campaign during the initial offer period. The campaign offers 203 prizes. The grand prize is RM3,000 of money market fund units.

MBSB rebrands AFB as MBSB Bank

Malaysia Building Society Bhd (MBSB) has rebranded its recently acquired Asian Finance Bank Bhd (AFB) as MBSB Bank. MBSB Bank's CEO Datuk Seri Ahmad Zaini Othman said the bank would provide Shariah-compliant products and services, such as consumer banking, business banking and trade financing. He added that the bank would also focus on developing its financial technology capabilities to attract more customers. The lender has already embarked on several digitisation initiatives, including big data projects started in June 2017. MBSB Bank plans to launch its fintech capabilities for wealth management and trade facilities by the third quarter of this year, and to have Internet banking facilities ready by end-2018. MBSB finalised its acquisition of AFB in February for RM644.95 million with the latter becoming a wholly owned subsidiary of MBSB. With the transfer of all MBSB’s Shariah-compliant assets and liabilities to AFB, MBSB Bank is the second-largest full-fledged Islamic bank in the country.

#Malaysia central bank to launch revised #takaful operational framework

Bank Negara Malaysia (BNM) plans to revise its takaful operational framework. Governor Tan Sri Muhammad Ibrahim said the revised framework would be published for consultation before the middle of the year. He said it would strengthen the governance of takaful operators, including how takaful funds are managed, to further safeguard the interest of takaful participants. On the objective of 25% family takaful penetration by 2020, he said it was ambitious, but achievable. Muhammad noted that the industry was lagging in terms of migration to e-payments. He added that another area that is wide open for innovation was the integration of takaful with elements of waqf, sadaqah and zakat.

Bank Rakyat to continue Islamic Banker Programme for the second edition

Bank Rakyat has recently launched its second edition of the Islamic Banker Programme which aims to produce future leaders for the banking industry. The programme recently received recognition from the 26th World HRD Congress 2018 by winning three top awards: Innovation in Recruitment, Best Apprenticeship and Usage of Digital Media in Recruitment. Throughout the training period, each trainee will be assigned to a mentor from the senior management team. Initially, each trainee will go through a two-month training program before they undergo job rotation across the key business units within the Bank for 10 months. Then, they will be placed in a particular sector based on their respective strengths and interests for a year. At the end, their performance will be assessed before being offered permanent placement at Bank Rakyat. At the end of the two year internship, participants will also be awarded with the Chartered Professional in Islamic Finance (CPIF) certificate from the Chartered Institute of Islamic Finance Professionals (CIIF).

Project Ar-Rahn 2 listing oversubscribed

Muamalat Venture, a wholly owned subsidiary of Bank Muamalat Malaysia had a second listing on Malaysia's Investment Account Platform. The investment book was oversubscribed by more than 1.05 times on the first day of its listing. Project Ar-Rahn 2 is an investment in a share of aggregate capital contribution of Muamalat Venture under the musharakah joint venture with Permodalan Kelantan, in selected branches of Islamic pawn broking (Ar-Rahn) business activities. The investment of RM20 million in Project Ar-Rahn 2 is for a tenure of one year and expected to generate a return of 7% per annum for investors.

MIMOS and INCIEF sign MOU for collaboration in the area of Islamic #Fintech

A Memorandum of Understanding (MoU) was signed by Malaysia’s Applied Research and Development Centre MIMOS and the International Centre for Education in Islamic Finance (INCEIF), to develop a blueprint for an Islamic finance-based investment technology platform. The MOU was signed by INCEIF President Dato' Dr Azmi Omar and MIMOS President Ahmad Rizan Ibrahim. Under the MOU, the two institutions will collaborate in research and development, in particular the areas of Big Data Analytics, Deep Learning and Fintech. Further, INCEIF and MIMOS may also cooperate in field-testing, technology transfer and commercialisation of technological products.

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