IslamicFinance.de

The enforcement of the Islamic Financial Services Act by Bank Negara Malaysia in June to distinguish between deposit and investment accounts offered by Islamic banks will pave the way for the introduction of new retail products. The development of the Islamic finance sector in Malaysia has enjoyed the support of the government, which has announced the RM150 million Investment Account Platform under Budget 2015. The platform, which is slated to start on Sept 1, is a shariah-compliant investment product designed to attract institutions and individuals to invest in the country's Islamic financial markets.

President Joko Widodo has laid out his invitation for increased foreign investment in Indonesia before the Islamic Development Bank, which already has sizeable interests in the country. Joko, on a tour of the Middle East, met with Jeddah-based IDB president Ahmad Mohamed Ali to discuss a wide range of topics, from ways to finance infrastructure projects and increase investment by Middle East countries into Indonesia, to expanding the nation’s Islamic banking industry. The IDB currently finances nearly $4.2 billion in development projects in Indonesia. The group is also processing a member-country partnership strategy with Indonesia for the 2015-2019 period.

Adam Capital Micro Credit Ltd, a Sharia compliant company and wholly owned subsidiary of Adam Capital PLC, entered in to an agreement with Islamic Insurance provider Amana Takaful Life Limited to promote their products, playing a facilitator role on a fee sharing basis. Adam Capital Micro Credit business has grown steadily since commencing operations in July 2015, and expects to generate steady additional fee based income by this arrangement. The plan is to serve the underserved community within a radius of 15km from the office located at Grandpass Road, Colombo 14, assisting them to up lift their living standards.

The house of Representatives has started discussing a proposal to allow other Islamic banks to operate in the Philippines, in an attempt to put it at the same level as commercial banks. The House committee on banks and financial intermediaries yesterday took up a proposal amending the charter of the Al-Amanah Islamic Investment Bank, which is currently the only Islamic bank in the country. House Bill 5989 seeks to amend Republic Act 6848 by breaking the monopoly of Al-Amanah bank, which would give the green light for the Bangko Sentral ng Pilipinas (BSP) to authorize new entities to come in. The Al-Amanah bank remains a fully owned subsidiary of the Development Bank of the Philippines.

Qatar National Bank is among suitors that submitted final bids for Kuwait Finance House KSC’s Malaysian operations, people with knowledge of the matter said. Kuwait Finance House is evaluating offers from Qatar National Bank and at least one other party, according to the people. It may not proceed with the sale unless it can agree on a high enough price, one of the people said. Kuwait Finance House’s Malaysian unit had a book value of 1.7 billion ringgit ($395 million) and total assets of 10.5 billion ringgit at the end of December, according to its 2014 annual report. Offers for the business were affected by the difficult economic environment in the country, one of the people said.

Kuwait Finance House will decide the fate of its Malaysian business by the end of this month, a spokesman said on Tuesday, after it had been reported that Qatar National Bank had bid to buy the unit. The sale ist part of of a broader restructuring of its operations. A spokesman for KFH said it was looking at several options whether to restructure, sell or merge its Malaysian business and that the decision will be concluded by the end of this month. A source familiar with the matter had said earlier that QNB had submitted a bid to purchase the Malaysian unit. The source declined to provide further details, and whether there were other bidders involved.

Bangladesh is a rare bird among developing nations: it benefits from a weakening Chinese yuan, is intervening to stop its currency gaining and is about to sell a debut Islamic bond in the quietest year for issuance since 2011. The nation is planning a $1bn note sale that may include a portion of Shariah-compliant notes anytime soon, central bank governor Atiur Rahman said. Only Hong Kong, Malaysia and Indonesia have issued global sukuk in Asia so far in 2015. Bangladesh Bank has sold $3.5bn of taka in the past year, boosting foreign-exchange reserves to a record $27bn, said Rahman.

Qatar National Bank is among suitors that submitted final bids for Kuwait Finance House’s Malaysian operations. KFH is evaluating offers from Qatar National Bank and at least one other party. It may not proceed with the sale unless it can agree on a high enough price. State-controlled Qatar National Bank has been expanding overseas to reduce its reliance on its home market. It has spent US$3 billion on acquisitions since 2012. Kuwait Finance House’s Malaysian unit had a book value of 1.7 billion ringgit (US$395 million) and total assets of 10.5 billion ringgit at the end of December. Offers for the business were affected by the difficult economic environment in the country.

A number of initiatives are demonstrating the rising momentum of Islamic finance in China. Chinese brokerage Southwest Securities forged a partnership with Qatar International Islamic Bank to pave the way for Islamic finance transactions in the country. The Qatari bank confirmed with IFN that it will leverage on this MoU to develop an Islamic finance framework for China. Chinese banking giant, the Industrial and Commercial Bank of China (ICBC), through its leasing arm entered into a collaborative agreement with the Islamic Corporation for the Development of the Private Sector (ICD), which is targeted to focus on multiple lines to develop Islamic capabilities and opportunities.

DBS Group Holdings is winding down its Islamic banking unit, The Islamic Bank of Asia (IB Asia), which it said has been unable to achieve economies of scale. The process of winding down the unit will likely take two to three years. IB Asia, which had been named "Best Islamic Bank in Singapore" by Islamic Finance News in January this year, offers wealth management services to high net worth customers. It also provides treasury, corporate advisory and capital market services to businesses. The move to wind down IB Asia is subject to obtaining approval from its shareholders and receiving regulatory approvals, DBS said.

Bambang Bodjonegoro, the Indonesian Minister of Finance, today rang the market-opening bell to celebrate the listing on Nasdaq Dubai of four Sukuk valued at six billion US dollars (AED 22 billion), issued by the Indonesian government under its Trust Certificate Issuance Programme since 2012. The Islamic bond listings are the largest ever carried out by a sovereign issuer in Dubai. Indonesia’s four Sukuk listings comprise one issuance of two billion USD dollars AED 7.3 billion), two of 1.5 billion US dollars (AED 5.5 billion) each, and one of one billion USD dollars (AED 3.7 billion). All listed on Nasdaq Dubai on May 31, 2015.

China’s Country Garden Holdings Co Ltd said it’s open to funding proposals from various domestic and international financial institutions, which include the possibility of setting up a sukuk programme and issuances to partly fund its proposed projects including the Forest City project in Johor. The company is reported to be interested in raising as much as RM800 million from a sukuk issuance. Forest City will be a mixed development project consists of commercial, residential, educational, healthcare centres and recreational facilities including man-made sandy beaches. The construction work on the project started in midMarch 2015.

REDmoney Events in partnership with Islamic Business and Finance Development Fund (IBFD Fund), will organize the IFN CIS & Russia Forum on the 9th of December 2015 in Moscow. The event is expected to draw market players and regulators from key Islamic finance markets globally and within the Russian Federation and CIS. Kazakhstan, Kyrgystan and Azerbaijan have developed Islamic banking since 2005 resulting in the creation of number of Islamic financial institutions. On its part, Tajikistan has recently started preparing a draft law on Islamic banking and finance. Russia as the largest country in CIS is also involved in Islamic finance development process.

Indonesian Islamic banks would survive a rupiah drop to as low as 16,000 against the US dollar, thanks largely to low levels of bad loans, a senior official at Indonesia's Financial Services Authority said. The banking industry's non-performing financing ?? bad loans in sharia banks ?? reached 1.3 percent as of July 2015, still lower than the 5 percent benchmark set by the OJK. In comparison, bad loans among conventional lenders stood at 2.5 percent of total loans at the end of July, according to OJK data. The rupiah has fallen 15.13 percent so far this year, trading at 14,322 against the greenback on Monday, according to the Jakarta Interbank Offered Rate.

Islamic banking and financing as it is introduced in the Philippines opened a lot of inquiries and challenges. In the previously held Forum on Islamic Banking and Financing by the Mindanao State University–Iligan Institute of Technology, in partnership with Anak Mindanao and National Commission on Muslim Filipinos last September 2 at MSU IIT Campus, Iligan City, participants from different sectors especially the future accountants of the university, both Muslims and non-Muslims, were given the basics of such concepts by the resource persons. This is a system that can be adopted by all.

Oil and gas player SapuraKencana Petroleum Bhd has made its first issuance of US$200mil (RM845.8mil) sukuk under the multi-currency sukuk programme. The company said in a filing with Bursa Malaysia that its unit SapuraKencana TMC Sdn Bhd (SKTMC) will use the proceeds to refinance some existing debt. The sukuk offering is the first to be launched under the new Securities Commission Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework effective June 15, 2015. The company announced last week that SKTMC had signed the transaction documents for the inaugural multi-currency Islamic medium-term note.

SapuraKencana Petroleum Bhd's share price rose this morning following its plan to launch a US$200 million (RM848.18 million) sukuk next week. The company's share gained two sen to RM1.79, as at 10.27 am, with 3.27 million shares changing hands. The first tranche of the sukuk, structured based on the Shariah principle of Commodity Murabahah, is scheduled to be launched on September 8, 2015. This is the first sukuk under the new Securities Commission's guidelines on Unlisted Capital Market Products under the lodge and launch framework effective from June 15, 2015.

The Anti-Corruption Commission (ACC) today approved a charge sheet against 14 people, including Bismillah Group’s Managing Director Khaza Solaiman Anwar Chowdhury, for embezzling Tk 110 crore from Shahjalal Islami Bank. Nine of them are employees of Bismillah Group, four of Shahjalal Islami Bank and one is Network Frame System Ltd’s Chairman Akhter Hossain. The accused include Soleman’s wife and group’s Chairman Nawrin Hasib, Solaiman’s mother Sarwar Jahan, former manager of Eskaton Branch of Shahjalal Islami Bank Aslamul Haq and former deputy manager ASM Hasanul Kabir. The controversial group swindled the money with the help of bank officials between June 2006 and October 2012.

In 2016 investors will be able to purchase about IDR 13.7 trillion (approx. USD $1.4 billion) worth of Islamic bonds to be issued by the Indonesian government. Indonesia will use proceeds from next year's bond sales to boost the nation’s infrastructure development. Government-led infrastructure development is regarded as key to overcome the current process of slowing economic growth that has been plaguing Indonesia since 2011. Demand for Islamic bonds may in fact be stronger than demand for conventional bonds. Indonesian sukuk is also less volatile compared to conventional bonds as investors tend to hold sukuk until maturity.

Maybank Islamic Bhd is optimistic that Malaysia's financial sector will hold strong in the current turmoil and weather through the storm. Its chief executive officer Datuk Muzaffar Hisham is also confident that foreign investors will continue to invest in Malaysia's financial sector for the long run. Muzaffar was speaking to reporters after the signing ceremony between Maybank Islamic and the Selangor State Government for a new home financing package. On Thursday, Maybank Islamic recorded a revenue of RM1.9 billion for the first half ended June 30, 2015. Muzaffar said the group is expecting a lower loan growth for the second half of this year and will continue to monitor closely to maintain sustainability for the next few quarters.