IslamicFinance.de

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.

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.

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.

American Express said it had not witnessed a rise in credit card debt in the Gulf region, despite over a third of households reporting they had spent more than they planned last year and one in four in the United Arab Emirates (UAE) saying they had contributed less to their savings and pension. Despite the economic headwinds across the region, Amex's research titled 'Spending Habits in the GCC: A Research Report' shows little slowdown in the volume of spending, CEO Mazin Khoury said. Khoury told Zawya he had not seen any increase in levels of credit card debt and that he was not concerned about changes in repayment trends, despite rising consumer spending levels and a more challenging financial environment as a result of lower oil prices and slower economic growth.

The first quarter of 2016 saw concept papers on Qard and Hibah issued by Bank Negara Malaysia. The Islamic Financial Services Board (IFSB) has provided a further update on the financial soundness and growth of Islamic banking systems. The International Monetary Fund (IMF) has published a working paper on Monetary Policy in the Presence of Islamic Banking. Concept papers on Qard and Hibah In January, Bank Negara Malaysia (BNM) issued a concept paper on Qard. The concept paper is divided between the sharia and operational requirements in relation to the operationalisation of Qard contract.

The Saudi Capital Market Authority Board approved the Investment Accounts Instructions after publishing the Draft Instructions on the CMA's official website for 30 days, and reviewing the concerned and interested parties' comments and observations. The Investment Accounts Instructions comprise 17 articles regarding several aspects of investment accounts such as the mechanism on how to accept clients, availability of specific data to open an investment account and instructions of opening and operating the investment account. The Instructions also include the specifications to open investment accounts.

A group under the auspices of Adamawa State chapter of the National Council of Muslim Youth Organisations (NACOMYO) has resolved to pursue wealth creation and provide job opportunities for members of Islamic Youth organisations through Agriculture as a business. In a communique, the association further stated that the move was in line with the policy thrust of the current Buhari Administration in collaborating with NASR of the Central Bank of Nigeria, JAIZ Bank and Standard Micro-Finance Bank. The association produced a 10 point recommendation geared towards developing a framework which will see to the Socio-economic Development of the Muslim Umma in Adamawa State.

Singapore's central bank has asked financial institutions to provide details of any transactions linked to Malaysian state investor 1Malaysia Development Berhad (1MDB) as part of its probe into possible money-laundering in the city state. The statement came late Thursday after it was reported earlier this week that the Monetary Authority of Singapore (MAS) has reportedly asked close to 40 banks with a presence in Singapore to provide information linked to 1MDB. Australia and New Zealand Banking Group (ANZ) and National Australia Bank (NAB) are believed to be among those queried. ANZ and NAB both declined to comment.

The world's first Global Halal Data Pool offers massive trade opportunities for halal products and services providers, especially when it connects to the global data syncronisation network in August. Serunai Commerce Sdn Bhd Chief Executive Officer Amnah Shaari said in developing the platform it collaborated with the GS1 Council in Brussels, producer of 95% of global barcodes, which also runs the global data syncronisation network. Serunai Commerce, currently working with over 200 halal certification bodies, would act as the live verification centre for halal products and services using the Global Trade Item Number, as specified by the GS1 attributes.

The latest region seen as having big potential for Islamic finance is the Commonwealth of Independent States (CIS), comprising eight countries plus Russia that until 1991 were part of the Soviet Union. Being home for a large Muslim population, especially in Central Asian CIS member states, the area is emerging as a new frontier region for Islamic finance as banking penetration is relatively low and demand for financing is strongly growing. In all these countries, growth is strongly dependent on production and export of commodities, not just oil and gas, but also coal, iron and precious metals, among others. This brings with it the need for huge infrastructure investments for the production cycles of those commodities, and also for processing and transportation.

La dernière déclaration du gouverneur de la Banque centrale sur la création imminente des banques participatives rassure sur la marche des préparatifs, tout en marquant un report inattendu de l’échéance, que les opérateurs ainsi que le marché attendaient pour le 16 mars 2016, soit quatre mois après la date de dépôt des demandes d’agrément, conformément à l’article 34 de la loi 103-12. Bien sûr, le même article dispose que ledit délai ne court qu’après la réception de tous les documents et des réponses aux questions complémentaires de l’autorité monétaire, et le gouverneur a pris soin de rappeler que les entretiens étaient en cours.

Nogaholding, the holding company for oil and gas assets owned by the government of Bahrain, signed to obtain a five-year, $570 million murabaha financing facility. The Islamic funding will support investment in a number of large oil and gas projects in the kingdom, including the BAPCO Modernisation Programme, a liquefied natural gas import terminal, and the Bahrain Gas Plant Project. The facility is provided by 10 international, regional and local institutions: Arab Banking Corp, Ahli United Bank, Arab Petroleum Investments Corp, Gulf International Bank, National Bank of Bahrain, Qatar Islamic Bank, Kuwait Finance House, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas and HSBC.

Malaysian Prime Minister Najib Razak spent about $15 million on luxury goods from his personal bank accounts. On Christmas Eve 2014, Malaysian Prime Minister Najib Razak stepped onto Hawaii’s 18-hole Kaneohe Klipper course for a round of golf diplomacy with U.S. President Barack Obama. Off the fairways, another side of Mr. Najib’s time in office was on display. Two days earlier, the prime minister’s credit card was charged $130,625 to Chanel in Honolulu. The credit card was paid from one of several private bank accounts owned by Mr. Najib that global investigators believe received hundreds of millions of dollars diverted from the indebted state-run fund 1Malaysia Development Bhd.

UDA Holdings Bhd has signed financing agreements with financial institutions for a syndicated Islamic financing facility of up to RM500mil to finance its eight projects with an estimated gross development value (GDV) of RM1.62bil. The financiers are Affin Islamic Bank Bhd, AmBank Islamic Bhd, RHB Islamic Bank Bhd, Bank Pembangunan Malaysia Bhd and Kuwait Finance House (M) Bhd. UDA managing director Datuk Ahmad Abu Bakar said the finance facility would be use to partly fund the construction of the projects nationwide and the rest would be funded by sales. The eight projects comprise commercial and residential developments.

Islamic Corporation for the Development of the Private Sector (ICD) and Saturna Sdn. Bhd., a wholly-owned subsidiary of US-based Saturna Capital Corporation, plan to sign an agreement to cooperate in offering sustainable Islamic investment vehicles. The parties sign the agreement at the Responsible Finance Summit in Kuala Lumpur on March 30. This partnership highlights ICD’s dedication to promoting the adoption of responsible investment principles in Islamic finance. In choosing Saturna as its partner, ICD will be tapping the firm’s expertise in global values-based investing and its experience in managing US-based Amana Funds as well as Saturna Sustainable Funds.

Nogaholding, the holding company for oil and gas assets owned by the government of Bahrain, signed to obtain a five-year, $570 million murabaha financing facility. The Islamic funding will support investment in a number of large oil and gas projects in the kingdom, including the BAPCO Modernisation Programme, a liquefied natural gas import terminal, and the Bahrain Gas Plant Project. The facility is provided by 10 international, regional and local institutions: Arab Banking Corp, Ahli United Bank, Arab Petroleum Investments Corp, Gulf International Bank, National Bank of Bahrain, Qatar Islamic Bank, Kuwait Finance House, Bank of Tokyo-Mitsubishi UFJ, BNP Paribas and HSBC.

Saudi's Alkhabeer Capital has released the 2016 edition of its report reviewing GCC governments’ budgets. The report analyses the latest budgets of the region’s governments, the recent reform measures announced and the broader, long-term implications of the political will to improve efficiencies, curb wasteful expenditures and instill fiscal discipline. Citing the emergence of government imperatives in the region to refocus budget priorities and reduce extravagance, Alkhabeer’s report expects expenditure levels in the GCC to reflect a cautious stance on spending as the region adopts unprecedented measures to counter the plunge in oil prices since June 2014.