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#Malaysian fund Lembaga Tabung Haji has hired broker Savills to find a buyer for its London office building at 10 Queen Street Place. The building was purchased by Tabung Haji in 2012 for £165 mn and is now expected to sell for about £200 million. Malaysia’s state investment funds have been selling UK real estate as the government called on them to help the country’s stock and currency markets.

Syarikat Takaful Malaysia Bhd (STM)’s first financial quarter ended March 31, 2016 (1QFY16) net profit was in line with their expectations, accounting for 24% of the full-year forecast. The positive takeaway from the 1QFY16 results was a swift expansion of 14.4% year-on-year (y-o-y) in gross earned contributions (GEC) to RM426.8 million. This emanated primarily from its family takaful unit, which chalked up a growth of 21.8% y-o-y in its 1QFY16 GEC (mainly from mortgage-related products).

The Thomson Reuters Global Sukuk Index was last at 118.52310 points, up from 116.97354 at the end of last year. The Thomson Reuters Investment Grade Sukuk Index is at 116.74988 points against 115.21206 at end-2015. Some of the sukuk in the pipeline are the following: Saudi International Petrochemical Co said in late March that it had appointed Riyad Capital and NCB Capital as lead managers for a sukuk issue, without giving further details. Saudi Arabian Airlines plans to raise 5 billion riyals (US$1.3 billion) via the first tranche of a sukuk issuance programme in the second or third quarter of this year. Kuwait's Boubyan Bank aims to issue US$250 million of sukuk before the end of April.

Today, crowdfunding is a part of the financial services segment known as financial technology (fintech). And it is seeing exponential growth in investments. There are four types of crowdfunding — debt, equity, rewards and donations. There are also new variants and concepts such as Islamic crowdfunding, which is the use of shariah-compliant crowdfunding platforms. Higher bank interest rates for property development have seen the emergence of real estate crowdfunding. And as interest rates continue to rise, developers will need to look beyond traditional financing for their projects, according to a Crowd101.com article entitled “Crowdfunding 2016 predictions: The next real estate boom?”

Investors can now look forward to investing directly in and sharing the profits from shariah-compliant investment activities via the first Islamic bank-intermediated financial technology (fintech) platform in the world. The Investment Account Platform (IAP) was launched by Bank Negara Malaysia on Feb 17. Similar to crowdfunding and peer-to-peer lending platforms, the IAP allows investors to fund either private or government-related ventures that are seeking financing to grow their business. Investors will be allowed to choose the ventures they invest in and may define the investment mandate and eligibility criteria for their financing, for example, the investment tenure and types of industries.

Sukuk issuance for the near term will remain stable despite current global economic uncertainties, as it is seen as a resilient financing instrument to weather through difficult times, according to Islamic Financial Services Board (IFSB) secretary-general Jaseem Ahmed. This is because the issuance of the Islamic finance instrument is very much dependent on preconditions of a particular country, and not solely or directly correlated to current economic and market volatility, he said. However, he added that while current concerns regarding global headwinds are not to be underestimated, many governments are recognising that it does help to have a diverse source of income.

Labuan International Business and Financial Centre (Labuan IBFC) has been recognised as a leading Islamic wealth management centre. In a statement today, Labuan IBFC said close to 55% of all respondents regarded it as a leading Islamic wealth management provider in a survey by London-based Edbiz Consulting. The survey, which reached more than 10,000 respondents globally, was aimed at assessing the knowledge, attitudes and practices towards Islamic wealth management in order to better understand the demand for Shariah compliant wealth management services within the investing community and their clientele. The research was part of the co-branded Islamic Wealth Management Report 2016, which was launched recently.

Khazanah Nasional Bhd may sell its stake in Bank Muamalat Malaysia Bhd only after the latter merged with Malaysia Building Society Bhd (MBSB) to form the country's largest full-fledged Islamic bank. Reiterating that it is not taking the lead in negotiations, Khazanah managing director Tan Sri Azman Mokhtar said the country's strategic investment fund is not particular about the structure of the merger, provided the valuations are fair. It has been reported that the merger would be effected via a share swap. There have been various scenarios bandied about on Khazanah's preferred outcome for its 30% stake in Bank Muamalat. DRB-Hicom Bhd holds the remaining 70% of Bank Muamalat.

As global Islamic bonds languish in the bleakest year for sales since 2010, the next 12 months look just as challenging. Malaysia’s CIMB Group Holdings Bhd ( Valuation: 1.65, Fundamental: 0.55), the top sukuk arranger worldwide for seven of the last nine years, predicts a pick up in 2016 to at least US$40 billion from 2015’s US$34.5 billion. The forecast is still 20% less than the record US$50.1 billion in 2012. Slowing economic growth could weigh on companies’ capital and their investment spending. Borrowers in the US$2 trillion Islamic finance industry also now face higher costs after the US raised interest rates for the first time in almost a decade and signaled more increases.

MAA Group Bhd, Solidarity Group Holdings BSC and Zurich Insurance Co Ltd (Zurich) has jointly submitted an application to Bank Negara Malaysia (BNM), for the sale of MAA Takaful Bhd stakes. In a filing with Bursa Malaysia, MAA Group said the application was for the Minister of Finance's approval, pursuant to the Islamic Financial Services Act 2013. The group did not reveal any detail of the divestment. MAA Takaful is a joint venture between MAA Group and Solidarity Company BSC (C) of Bahrain, of which MAA controlled a 75% equity stake, while the remaining 25% is controlled by Solidarity Group. BNM had on June 15 said it granted its greenlight for MAA Group to commence negotiations with Zurich for disposal of its 75% stake in its takaful insurance arm.

Prime Minister Najib Razak’s plan to revive Malaysia’s faltering economy is getting no help from the country’s Islamic bond market.
Yields on government 10-year sukuk, used by companies to gauge the cost of Shariah-compliant financing, are at their highest level in 18 months relative to two-year securities, according to data compiled by Bloomberg. And with the slide in Brent crude prices sapping Malaysia’s oil-export revenue against a backdrop of looming U.S. interest-rate increases, investors say longer-term borrowing won’t be getting cheaper anytime soon.
“With the U.S. expected to raise interest rates soon, Malaysia’s yield curve will remain steep next year,” said Elsie Tham, a senior fund manager at Kuala Lumpur-based Manulife Asset Management Services Bhd who oversees more than US$1 billion. “Companies will find it challenging to raise funds because of slower economic growth.”

The ratings of rated Malaysian corporate sukuk, or Islamic bonds, reflect the credit quality of the underlying corporate backing the sukuk, despite the various assets in their sukuk structures, according to Moody's Investor Service.
In a statement today, the credit rating agency said that it had reiterated its conclusion in its analysis of three Malaysian corporate sukuk which it rated in 2015, namely Axiata Group Bhd (Baa2 stable), Telekom Malaysia Bhd (TM) (A3 positive), and Petroliam Nasional Bhd (Petronas) (A1 stable).

The Islamic Finance industry in the country is facing an acute shortage of talent to serve the growing needs of the industry, as it is seeing a mismatch between the supply and demand of skilled workers in the niche financial sector. Chief executive director of Finance Accreditation Agency (FAA) Dr. Amat Taap Manshor said that globally, there is a shortage of close to 56,000 professionals to serve the growing industry.
Dr. Amat told the audience during a forum at the 11th World Islamic Economic Forum that there needs to be a deeper collaboration between academia and the industry to address the shortage. “The capital market sector is seeing the most acute shortage of Islamic Finance professionals, followed by takaful and banking,” Dr. Amat told reporters on the sideline after the forum. He said addressing the shortage issue has to be a continuous effort by all parties in the industry, and hopes that the country can see 40,000 Islamic Finance professionals in the market by 2020.

Crowdfunding is the latest buzzword to hit the financial industry. It is a form of alternative financing that has emerged outside the realm of the traditional financial system. To illustrate the rapid growth of the crowdfunding industry, such platforms raised US$89 million (RM369.6 million) in 2010, US$1.47 billion in 2011 and US$2.66 billion in 2012. Fast forward to 2014, and the total amount raised from crowdfunding had risen to US$15 billion. The amount is forecast to reach a massive US$34 billion this year. Crowdfunding will go a long way in helping the Islamic finance industry achieve one of its major goals, which is financial inclusion for all.

Khazanah Nasional Bhd plans to divest its entire 30% stake in Bank Muamalat Malaysia Bhd in the proposed merger between the lender and Malaysia Building Society Bhd (MBSB), sources say. That it plans to sell the entire 30% stake isn’t exactly surprising considering that Khazanah has long made it known that it considers the stake a “non-core holding”, which meant that it was open to letting it go at the right price. Another reason for the planned divestment is that Bank Negara Malaysia is not keen on the government investment arm owning major stakes in more than one bank. It already owns 29.34% in CIMB Group Holdings Bhd.

Khazanah Nasional Bhd is "not in a rush" to sell its 30% stake in Bank Muamalat Malaysia Bhd, under the proposed merger with Malaysia Building Society Bhd (MBSB). Khazanah's managing director Tan Sri Azman Mokhtar said the Malaysian state-owned investment arm's decision was incumbent upon the negotiated value for its Bank Muamalat stake. He cited the right price and the right configuration as requirements for a sale. DRB-Hicom Bhd holds the balance 70% stake in Bank Muamalat. According to Azman, as Khazanah is only a 30% shareholder in Bank Muamalat, Khazanah is not taking the lead in the merger talks. Khazanah will make a decision based on whatever they decide, he added.

Malaysia Building Society's (MBSB) planned merger with Bank Muamalat Malaysia is expected to create a financial services entity with a collective asset size of some RM60 billion. Affin Hwang Investment Bankwrote in a note today that MBSB and Bank Muamalat's assets were valued at RM41 billion and RM22 billion respectively. Nevertheless, there could be potential write-offs of the loan book subsequent to due diligence exercises, which is likely to follow suit. However, Affin Hwang also said they were not too optimistic about the merger, as previously there have been other merger discussions between Bank Muamalat and other parties that were unsuccessful.

Malaysian companies building railways and power plants under Prime Minister Najib Razak’s $444 billion development program will help revive sukuk sales from the slowest quarter since 2010. Corporate issuance could rise to as much as 60 billion ringgit ($13.5 billion) for the full year, said Mohd. Effendi Abdullah, head of Islamic markets at Kuala Lumpur-based AmInvestment Bank. While the forecast would mark a pickup from the 31.5 billion ringgit sold so far this year, offerings would still remain below levels for the past three. Effendi said sukuk issuers that need the funds will still go ahead with sales even if market conditions are tough because they can structure longer-maturity debt to appeal to pension funds and insurers.

Indonesia is drawing interest from Middle Eastern banks seeking to tap the world’s biggest pool of Shariah-compliant investors as some Islamic lenders wind down or close operations in Malaysia and Singapore. Emirates NBD PJSC wants to invest at least US$300 million in a new Shariah lender or acquire a stake in an existing one. The investments would be a boost for Indonesia in its ambition to become an Asian hub in the US$2 trillion industry. Emirates NBD’s plan comes as Kuwait Finance House prepares to close its Islamic operations in Malaysia, while Bahrain’s Elaf Bank BSC has already done so. DBS Group Holdings Ltd is winding down its Singapore arm catering to Muslims.

CIMB Group Holdings Bhd is expected to appoint Rafe Haneef, who currently heads HSBC Amanah Malaysia Bhd, as the new chief executive officer of its Islamic banking arm CIMB Islamic Bank Bhd. It is understood that Rafe has tendered his resignation, after almost five years of helming the foreign Islamic lender. The appointment is still in the process of getting Bank Negara Malaysia’s approval. CIMB Islamic Bank has been without a captain ever since Badlisyah Abdul Ghani resigned as its CEO and board member in July. CIMB Islamic Bank then appointed Mohd Shafri Shahul Hamid as the person in charge of the bank while it looked for a new CEO.