IslamicFinance.de

Bank Muamalat Malaysia Bhd sees a listing of the bank as an alternative for its shareholders, but is of the view that the market is not conducive for such an exercise currently. Bank Muamalat is 70% owned by DRB-Hicom Bhd and the rest is held by Khazanah Nasional Bhd. A potential listing of Bank Muamalat could be an option if DRB-Hicom fails to find a suitable suitor to acquire a stake in the bank. DRB-Hicom is required to pare down its stake in Bank Mualamat to 40% but this has been delayed for a few years because it was unable to agree on the terms with potential buyers.

Bank Muamalat Malaysia Bhd targets to sell about 320kg of Muamalat Gold-i (MGi) valued at about RM56mil for the financial year ending March 31, 2017 (FY17). Chief operating officer (Business), Mashitah Osman, said MGi was the bank’s latest initiative to boost its wealth management segment. Physical gold bars are available in five, 10, 20, 50 and 100gm. Without any publicity, the bank has sold over 80kg worth RM14mil since it was opened to the public two-and-a half months ago, Osman said. Meanwhile, vice-president/head wealth management departmen, Nur Ain Ramli, said the bank expected the gold business to contribute about 60% of the total fee income for the wealth management segment for FY17.

Professor Datuk Rifaat Ahmed Abdel Karim, PhD, PJN is an authority in the Islamic financial services industry (IFSI) both at the professional and academic levels. He has played a pioneering role in the development of Islamic finance, while his leadership in setting accounting, auditing, governance, Shariíah and regulatory standards has been instrumental in establishing the position of the IFSI in the mainstream of global financial services. He believes that some of the major internal barriers have emanated from a lack of a proper understanding of the specificities of Islamic finance. Many tend to interpret Islamic finance transactions either from their conventional knowledge or their perspective of understanding Islamic Fiqh.

Gold products used in Islamic finance would need to be physically-backed and allocated to the underlying asset, according to a draft of a standard for Shariah gold being developed. Mohd Daud Bakar, a Shariah scholar who is writing the draft for the Accounting and Auditing Organisation for Islamic Financial Institutions, said the document is almost finished. The committee formed to develop the gold standard will meet once more next Sunday and then submit the proposal to AAOIFI's Shariah Board, he said. The gold standard is expected to be completed later this year, and public hearings could be held in Morocco and Dubai and possibly Indonesia or Malaysia, Bakar said.

Regulators of financial markets in the Gulf Cooperation Council (GCC) are urged to develop the infrastructure and regulatory framework in order to boost the sukuk market in the region, according to Zamir Iqbal, a World Bank expert. The sukuk market in the GCC presents ample opportunities, especially as governments are likely to resort to it for capital given the plunge in their revenues from lower oil prices, the lead financial sector specialist at the World Bank said. Iqbal added that the overall debt and capital market in the region needs to be strengthened with laws governing elements such as investor protection, and how to handle disputes and insolvency, among others.

While 1Malaysia Development Bhd (1MDB) is seeing a positive balance sheet with total assets exceeding total debts by RM3 billion, it cannot be denied that revaluation of its land assets, which were acquired relatively cheaply, is what saved it from slipping into a deficit. As at last January, 1MDB had RM53 billion in assets compared with RM50 billion in debts. While details of 1MDB's latest assets and debts are not available, past records do show that its cheap buys in the land division with the federal government especially have worked to help bolster its balance sheet by at least RM6.36 billion.

As the 13th OIC (57-member Organization of Islamic Cooperation) Heads of State Summit gets under way in Istanbul this week, it is important to remember that whilst many Muslim countries are known for oil and gas, this is not, however, their most valuable resource, and it is not the only sector that needs to be invested in. Our youth will last longer than our oil reserves, and their worth is impervious to price fluctuations and market forces. Investment in youth is now a top priority for Muslim countries, because if we do not invest in our young people, someone else will – this is a free market. This is why the Islamic Conference Youth Forum for Dialogue and Cooperation (an OIC affiliated international institution headquartered in Istanbul) have convened a youth summit.

Malaysia plans to sell as much as US$1.5 billion of global Islamic bonds, less than a month after Indonesia's sukuk attracted bids of more than three times the offered amount. The marketing of the notes started on Monday and they will likely have maturities of 10 and 30 years. The proceeds will be used to refinance US$1.2 billion of Shariah-compliant debt coming due in July. Malaysia's sale coincides with a rebound in the ringgit, which has rallied more than 10 per cent this year. A pick up in Brent crude is also brightening the outlook for the oil exporter's finances, just as sentiment is improving after an indebted state investment company sold off assets.

Investcorp organised its annual Investcorp Leadership Program at the University of Oxford’s Saïd Business School. The four-day program, held between 29 March and one April 2016, was attended by 41 aspiring young business leaders from the GCC. The program officially began with a keynote address by Mohammed Al Ardhi, Executive Chairman of Investcorp, who spoke about the importance of innovation and entrepreneurship. Faculty from Oxford Saïd delivered a series of interactive sessions on shaping the markets in which companies operate, embedding entrepreneurship in organizations and scaling family businesses. Demonstrations of the latest research in bioresearch and microscopy were also organised at the University’s Advanced Bioimaging Unit.

A niche area only a few years ago, new ethically focused products and funds are popping into existence at a rapid rate, while mainstream funds are increasingly trying to keep up by integrating environmental, social and governance (ESG) standards into their investment decision-making. Trustworthy corporate brands take a long time to build based on years of good governance, treating customers fairly and contributing positively to society, but it takes seconds for that brand and consumer trust to be destroyed. Consumers, governments and non-governmental bodies are increasingly targeting companies that have demonstrated poor governance, show scant regard for environmental standards or have records of poor labour relations.

Sofyan Djalil, Minister of National Development Planning, said that the National Sharia Finance Committee (KNKS) is tasked with building the industry by implementing the Master Plan for Indonesian Islamic Financial Architecture. The plan will include the formation of sharia investment banks owned by the government and privates, as well as the formation of takaful and retakaful firms owned by the state. It will also include the formation of the Islamic Financial System Safety Net. The KNKS, Sofyan said, will be led by President Joko Widodo. The government will work together with the Financial Services Authority (OJK) in preparing regulations that can accommodate the industry.

Today, the country's business fraternity received news about the resignation of 1Malaysia Development Berhad's board of directors following the release of the Public Accounts Committee (PAC) report on the national strategic investment company. The key people behind 1MDB are Tan Sri Lodin Wok Kamaruddin, Chairman, and Arul Kanda President and Group Executive Director, among others. Tan Sri Lodin Wok Kamaruddin is the Chief Executive of Lembaga Tabung Angkatan Tentera since August 1982 and the Group Managing Director and Deputy Chairman of Boustead Holdings Berhad. Arul Kanda joins 1MDB from Abu Dhabi Commercial Bank where he was Executive Vice-President and Head of Investment Banking.

Being syariah-compliant can help businesses generate long-term returns, a panel discussion heard yesterday. That is because compliance involves adopting socially responsible practices. Mr Rushdi Siddiqui, co-founder and chief executive of Zilzar Tech, noted that companies with such socially responsible practices typically have lower funding costs, and the returns after they are listed are typically greater. A report from Arabesque Asset Management presented similar findings. It reviewed 51 academic studies and found that 88 per cent showed a positive correlation between sustainable practices and operational performance.

Islamic Corporation for the Development of the Private Sector (ICD) has launched a $300 million five-year sukuk that should price later on Wednesday. The transaction seems to have struggled to gain traction with investors, having initially been earmarked to price as early as Tuesday and sized as a benchmark offering. ICD has "retained a portion of the transaction", but no details were given. The issuer has also set pricing at the wide end of the 125-130 basis points over midswaps guide range given on the previous day. Noor Bank and Warba Bank have been added to the 10-strong group of banks arranging the transaction: Bank ABC, Boubyan Bank, CIMB, Dubai Islamic Bank, Emirates NBD, First Gulf Bank, HSBC, Mizuho, Societe Generale and Standard Chartered.

Gemeinschaftsbank für Leihen und Schenken (GLS), a German bank that focuses on investing in socially responsible and ecological projects, recently invested EUR 13 million (USD 14.5 million) in Sanad Fund for MSME, a Luxembourg-based public-private partnership that provides debt and equity financing in the Middle East and North Africa. As of March 2016, Sanad has raised total investor commitments of USD 186 million. As of 2013, GLS had total assets of EUR 3.2 billion (USD 4 billion), deposits of EUR 2.8 billion (USD 3.5 billion), a loan portfolio of EUR 1.7 billion (USD 2.1 billion) and 165,000 customers.

Leaders of the World Bank, United Nations, and Islamic Development Bank Group pledged to work closely together in the region. They recently launched the new financing initiative to support the MENA region aimed at uniting the international community to face the region’s immense challenges, including flow of refugees, and to launch of the process of growth, recovery and reconstruction. This approach aims at completing the massive humanitarian effort through strengthening the capacities of individuals and local communities. The plan needs forming broad alliances as the objectives of the new strategy and the resources necessary to achieve them exceeds the capacity of any single organization.

Bank of Tokyo-Mitsubishi UFJ (BTMU), through its newly established Dubai branch, has become the first Japanese lender to provide Shariah-compliant corporate financing through an overseas branch after respective regulations have been loosened by Japan’s Financial Services Agency last year. The bank said it is issuing a $200mn loan to a unit of Saudi Arabian national mining company Ma’aden. BTMU launched an overseas branch in October last year in the Dubai International Financial Center with an Islamic window after receiving permission from the Dubai Financial Services Authority. The bank is currently preparing a number of Islamic products with an initial focus on commercial loans and trade finance services.

Malayan Banking Bhd (Maybank) and Singapore-based RB Capital inked a S$260mil (RM751mil) Islamic financing deal, one of the biggest Islamic deals in Singapore. The landmark deal involved a 442-room mid-tier Holiday Inn Express Singapore Clarke Quay as the underlying security. The bank is continuously looking at growing its Islamic banking business in the region, especially in Singapore and Indonesia, which each currently accounts for about 5.0% of Maybank Islamic’s revenue. Maybank Group’s Islamic banking business in 2015 surged 20.4% in total income compared to the year before.

The relations between Malaysia and Japan is characterized by a special nature, not seen in any other countries in this region. The relations are underpinned by a strong bond, forged for a long time by a policy called the Look East policy. This Look East policy has worked as a lynch-pin between the two nations. Under this Look East policy, young people in Malaysia have been studying in Japan and this policy has brought back benefits through the brains and hands of those young people to help the Malaysian economy to invigorate. As Malaysia in an Islamic nation, Malaysia can open a gateway for Japanese investors to the markets of the Islamic nations. Some of the Japanese financial institutions have already started to issue Sukuk bonds.

Indonesia lacks the political commitment needed to develop Islamic finance, causing it to lag behind Malaysia in that area, experts have said. In Malaysia, there is a top-down approach, the government aims to be the global Islamic financial hub," Senior economist for the British Embassy in Jakarta, Edi Wiyono said. Meanwhile, in Indonesia, Islamic finance has grown from the bottom-up, with the public-initiated establishment of Bank Muamalat, the first sharia bank in Indonesia, he added. Indonesia is still the biggest retail sharia market in the world but the contributions of sharia finance in big projects, such as infrastructure, are still lacking.