IslamicFinance.de

The International Islamic Liquidity Management (IILM) has successfully reissued USD990 million benchmark size short-term Sukuk. i) A USD490 million 3-month tenor priced at 0.56260% profit rate, which received total bids of $1.1 1 billion from 11 bids. ii) A USD500 million 6-month tenor priced at 0.78570% profit rate, which received total bids of just over $1 billion from 14 bids. The reissuance of USD990 million Sukuk auction was fully subscribed by IILM primary dealers. After a quiet start to 2015, Sukuk market activity picked up this week a short-term issuance by the Bahrain Central Bank and with announcements of upcoming issuances from Gulf Finance House, Qatar Islamic Bank, Indonesian national air carrier Garuda Indonesia, and the Islamic Development Bank.

Maybank Islamic has launched its Shariah Centre of Excellence (SCOE), which focuses on research and education, talent development, thought leadership and community welfare. Its chief executive officer Muzaffar Hisham said the center was a virtual centre, which aimed to be a repository of Shariah knowledge and reference point on best practices for industry players, academic fraternities and the general public. The bank has collaborated with INCEIF, the Global University of Islamic Finance, including sponsoring the university’s auditorium and post-graduate students. Maybank Islamic has also rolled out other programmes under the SCOE initiative, including a public lecture series as well as Islamic finance publications.

L'Etat du Sénégal a été retenu par un jury composé de banquiers, de journalistes, de professeurs d’universités, de spécialistes de la Finance islamique, à l'issue d'une table ronde, mi-janvier 2015 à Kuala Lumpur, en Malaisie. La réunion de janvier dernier en Malaisie vient de décerner un satisfecit à l'Etat du Sénégal. Après son émission obligataire islamique sur le marché international d'un montant de 100 milliards de f CFA (premier du genre au sud du Sahara), menée par la BIS (Banque islamique du Sénégal) et arrangée par Citibank Dubaï et ICD, la signature du portefeuille de l'Etat prend ainsi de la voilure auprès des investisseurs et prêteurs "halal".

Indonesia seems to push ahead with its plans to create a new $8bn Islamic bank that would mainly arise from the merger of three large domestic Shariah-compliant lenders. According to the chairman of Indonesia’s Financial Services Authority, Muliaman Hadad, the merger between the Islamic finance units of government-controlled Bank Mandiri, Bank Rakyat Indonesia and Bank Negara Indonesia, as well as a small unit of Bank Tabungan Negara, could happen as early as this year. The idea behind the mega-merger is to create an Islamic banking institution that would be able to face the growing foreign competition, as well as to boost the currently quite small market share of Islamic finance in the country. The new Islamic mega-bank would also be a catalyst for new products for retail customers and businesses.

Weak economic conditions scuppered plans for a tie-up of Malaysia’s CIMB Group Holdings Bhd with RHB Capital Bhd and Malaysia Building Society Bhd (MBSB). It would have created Southeast Asia’s fourth-largest bank with assets of US$190 billion (RM692.63 billion). MBSB, a non-bank lender and the smallest of the three firms, is now studying a plan to convert itself into a full-fledged Islamic lender. It said last week it would convert existing conventional financial products into Islamic ones while introducing new ones to close the gap with competitors. Meanwhile, both CIMB and RHB Capital have established, domestically focused, Islamic units.

Malaysia-based International Islamic Liquidity Management Corp (IILM) will hold two auctions next week to issue a combined US$990mil (RM3.6bil) worth of sukuk, under a programme that is now authorised to issue US$3bil (RM10.9bil) in short-term paper. The IILM would auction US$490mil (RM1.8bil) worth of three-month sukuk and US$500mil of six-month sukuk on Tuesday. It is only the second time IILM has issued six-month paper. The IILM programme, rated A-1 by Standard and Poor’s, has US$1.85bil (RM6.7bil) worth of sukuk currently outstanding.

Asia is set for the busiest year for dollar sukuk sales in at least five years as Malaysia’s state oil company plans a record offering and Indonesia’s government seeks to beat rising US borrowing costs. Malaysia’s Petroliam Nasional may sell as much as $7 billion of Islamic notes while Cagamas and Export Import Bank of Malaysia have also planned offerings for this year. Meanwhile, Indonesia is seeking to return to the fold in the first half of this year. The average yield on US currency sukuk has dropped 13 basis points to 2.92 percent this year. The planned sales by Petronas, Malaysia and Indonesia will be positive as they will help ease the shortage of sukuk.

Indonesian and Malaysian Islamic bonds are diverging as cheaper oil has opposite impacts on fiscal budgets. The yield on Indonesia’s US dollar Sukuk due 2022 fell to a 21-month low of 3.72 per cent in February, while Malaysia’s 2021 debt yield climbed to 3.05 per cent. Default risk for Indonesia has dropped nine basis points this year to 148, while that for Malaysia rose 15 to 121 just as both nations plan US currency global offerings before the Federal Reserve starts raising interest rates. Barclays Plc forecast a sovereign credit upgrade for Indonesia after an overhaul of a decades-old fuel-subsidy program last month. Malaysia, the region’s only major crude exporter, is contending with a drop in revenue and a higher budget-deficit target, prompting Fitch Ratings to warn of a possible rating downgrade.

The Malaysia-based International Islamic Liquidity Management Corp (IILM) will hold two auctions next week to issue a combined $990 million worth of sukuk, under a programme that is now authorised to issue $3 billion in short-term paper. The IILM will auction $490 million worth of three-month sukuk and $500 million of six-month sukuk next Tuesday. It is only the second time the IILM has issued six-month paper. The IILM programme, rated A-1 by Standard and Poor's, has $1.85 billion worth of sukuk currently outstanding. Its sukuk programme permits maturities of up to one year.

The year 2014 brought changes for the Russian economy. The sanctions imposed by the European countries and the US and historically low oil prices have led to prices to double and businesses to lose access to traditional finance. At the annual Gaidar Economic Forum on January 14-16, a session was dedicated to Islamic finance and its development prospects in Russia. Indeed, 2014, especially its second half, was filled with economic and finance forums and seminars, which embraced among other topics, the issue of Islamic finance. The industry, which is capable of bringing new investments into the market, finally seems to be taken more seriously. Islamic finance is now being studied at various government bodies and institutions, both at the federal and regional levels.

Zilzar Tech Sdn Bhd (Zilzar) has announced the appointment of Mr. Akira Miyama to its Advisory Board. He joins six other international members: Mr. Saleh Lootah, Mr. Safdar Khan, Mr. Rafik Kassim, Mr. Ebrahim Pate, Sir Iqbal Sacranie and Mr. Rahman Khan. Mr. Miyama recently retired as Executive Director of RHB Bank. He also served as Director of RHB Investment Bank, Director of RHB Sakura Merchant Bankers Berhad and Non-Independent Non- Executive Director of RHB Capital Berhad. Zilzar is a B2B and B2C global information, content, community, and trade platform for the Muslim Lifestyle Marketplace.

Malaysia reportedly plans to tap the global Islamic bond market for the first time in almost four years. Banks have been asked to submit proposals for a dollar-denominated debt offering. Malaysia will become the first sovereign to tap the overseas Islamic bond market this year and Indonesia also plans an offering. Malaysia’s state-owned Petroliam Nasional Bhd. is seeking to sell a dollar Sukuk of as much as $7 billion. Malaysia last tapped the market in 2011, when it sold $2 billion of Shari’ah-compliant notes with maturities of five and 10 years. The yield on the 2.991 percent securities due in 2016 has climbed to 1.4 percent from 2014’s low of 0.98 percent.

Russian banks are developing their expertise in Islamic finance to help broaden funding sources for local firms, though Western sanctions over the Ukraine crisis could hinder those efforts. Banks in the Middle East and southeast Asia, the major markets for sharia-compliant debt, are wary of becoming tangled in the EU sanctions. So some Russian lenders are trying to build their own in-house knowledge of Islamic finance. State development bank Vnesheconombank (VEB) is seeking help from Middle East firms to develop its Islamic finance expertise. VTB Bank is exploring sukuk deals for several of its clients. However, the lack of a Russian regulatory framework for Islamic finance is an obstacle.

The International Islamic Banking and Finance Law Conference took place in Kuala Lumpur, Malaysia, February 4-5, 2015. The conference hosted many high profile speakers including the CEO of CIMB Islamic Bank, Badlisyah Abdul Ghani, who stressed the point that everyone now working in Islamic finance should make a strong effort to learn or further develop their skills in Shari’ah. Camille Paldi, FAAIF CEO, noted that it is imperative for the Islamic Finance industry to develop a unique dispute resolution system tailored for Islamic finance. In addition, Paldi suggests that it might be wise to form a global Islamic finance bankruptcy court to handle the world’s sukuk defaults.

The date for the Kazan Sukuk Conference has been shifted to Thursday, April 9, 2015. The location of the conference will remain the same, the 5-star Mirage Hotel in Kazan, Tatarstan, Russia. This change was made according to the desire of participants and speakers of the Conference. The Conference brings together over 100 representatives of the Russian government, regulators, business entities and international sukuk market players to discuss sukuk structures and their application, jurisdictions and platforms for sukuk issuances, investment projects and underlying asset pools, regulation and Sharia issues. To get more information about the event please visit: www.kazansukuk.ru.

Funding for infrastructure projects will be the driver for sukuk issuances this year, says CIMB Islamic Bank chief executive officer, Badlisyah Abdul Ghani. He said the sukuk issuance in 2015 could emulate the peak of 2012, if all planned infrastructure projects such as My Rapid Transit, the Pan-Borneo highway and Kuala Lumpur-Singapore high speed train venture come on stream. Badlisyah said for the market to be sustainable, more mid size offerings of between RM1 billion and RM2 billion are needed, as compared to a single mega size issuance of RM20 billion. Meanwhile, on CIMB Islamic,Badlisyah said the bank is currently working on a few sovereign deals which are expected to come on stream in the middle of this year.

Bangladesh has long been a success story for women’s financial inclusion. But in terms of digital finance, the story is very different. Despite being identified as a “mobile money sprinter” by the GSMA, only 18% of digital finance users in Bangladesh are women, with even fewer holding registered accounts. This is perplexing, given the rapid growth of digital financial services now reaching more than 21 million registered account holders. There are a number of potential reasons, including the fact that women are less likely to have an official identification. Besides, English-language phone menus may have a disproportionate impact on women. Nevertheless, there are resources and market players available to bridge this gender gap.

Al Rajhi Banking & Investment Corp (Malaysia) Bhd, which has launched its first bancatakaful product offerings in collaboration with Great Eastern Takaful Bhd, is confident that takaful products will contribute 20% to its fee-based income for 2015 or RM15 million worth of contributions. Al Rajhi Bank Malaysia acting CEO Selamat Sirat said the collaboration marks the introduction of its first syariah compliant protection plan products, which are i-Great Raudhah and i-Great Bakti. Selamat added that it is looking at a 50% growth year-on-year for its fee-based income. It is also looking for the opportunity to expand the fee-based income business through its range of wealth management products.

Indonesian authorities are pushing ahead with a plan to create an $8 billion Islamic megabank, even after a similar proposal fell through in Malaysia. A potential merger of the shariah-compliant units of government-controlled Bank Mandiri, Bank Rakyat Indonesia and Bank Negara Indonesia could happen as soon as this year, Financial Services Authority (OJK) chairman Muliaman Hadad said. Talks are ongoing with the State-Owned Enterprises Ministry, which first proposed the merger in May 2013. The megabank could help drive a quadrupling in Islamic banks’ market share to 20 percent by 2018, compared with 10 percent without it.

Maybank Islamic Bhd, the Islamic banking arm of the Maybank Group, has introduced its latest offering – Maybank Islamic Custody Services, both domestic and abroad. Maybank Islamic will be targeting prospective clients such as the Government-linked Companies (GLCs) in Malaysia, fund management companies, institutional investors and sovereign wealth funds, which in total would have an estimated asset under management of about RM1.4 trillion. Maybank Islamic Custody Services also has the capability of monitoring non-syariah compliant securities should clients accidentally purchase them or should the syariah compliant securities subsequently deemed non-syariah compliant.