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Last month, Ikim organised a seminar on “Promoting Waqf as a Mainstream Tool in the National Economic Policy”. Several issues were discussed on the potential of waqf in supporting the social and economic development of the nation. One such issue perceived to impede its ability to unleash its fullest potential is the prevalent scepticism about the capability and professionalism of waqf management in managing its assets. Undoubtedly, waqf institutions – especially those under the purview of state religious councils – that are as professionally managed as well-governed corporations can significantly contribute towards improving the welfare standards and quality of life of many in a particular location or state.

Bank Muamalat Malaysia Bhd plans to grow its total deposits by up to 20 per cent this year from RM15 billion at present by diversifying its depositor base. Chief Executive Officer Datuk Mohd Redza Shah Abdul Wahid said the bank was aggressively diversifying its depositor base through the "Oh Yeah Deposit Campaign" as well as working with small and medium enterprises (SMEs) and business chambers. On overseas ventures, he said the bank was exploring opportunities for tie-ups with Islamic banks in Asean countries which were expected to take place in the next 12 months. Meanwhile, Chief Operating Officer Asri Awang said Bank Muamalat of optimistic of a loans growth of 15 per cent this year from its current financing base of RM11 billion.

The chief executive of Dubai Islamic Bank (DIB), Adnan Chilwan, said it was in talks to buy a 40 percent stake in an Indonesian Islamic lender to help diversify its revenues. DIB hopes to conclude a deal before the end of the year and that it will pay for the purchase using its own cash reserves. However, Chilwan declined to name the acquisition target, adding its parent was a listed company. Chilwan said in March that DIB planned to expand its operations into Indonesia, Kenya and other African countries. DIB's last acquisition came last year when it completed the takeover of Dubai-based mortgage lender Tamweel, having previously owned 58.2 percent of the firm before the buyout offer.

The Islamic Corporation for the Development of the Private Sector (ICD) and the Bank of Tokyo-Mitsubishi UFJ (Malaysia) Berhad (BTMUM) have signed a memorandum of understanding (MoU) to form a joint strategic collaboration to tap opportunities in the Islamic finance industry. Khaled Al-Aboodi, ICD’s CEO and general manager, and Naoki Nishida, BTMUM CEO, inked the MoU at BTMU headquarters in Tokyo. The parties intend to leverage each other strengths and expertise especially to expand its Islamic finance activities in the ICD member countries. Khaled Al-Aboodi said the agreement will strengthen and deepen the ICD’s relationship with its non-traditional partners from the Pacific region especially to promote cross-border investment in ICD member states.

International law firm Simmons & Simmons and the Kyrgyz Republic have signed an agreement to provide consultancy services for the development of laws and regulations, supporting the introduction of Takaful and Sukuk in the Kyrgyz Republic. The consultancy services to be provided by Simmons & Simmons are to be funded under a technical assistance grant provided by the Islamic Development Bank (IDB). First Vice Prime Minister of the Kyrgyz Republic, HE Tayirbek Sarpashev, noted that upon the signing of this Agreement, the Government expects the economy to attract large investments that will favourably affect the development of the financial market and banking sector. The Simmons & Simmons team is led by Muneer Khan, assisted by managing associate Tariq Hameed.

In some countries such as Indonesia, creating shariah-compliant insurance products for the lower middle income people is a necessity that slowly started to gain attention and priority. Awareness for micro insurance, in general, and Islamic micro insurance in particular is still very low. This will affect SME's decision to buy Takaful products. In order to integrate equation viewpoint of Islamic micro insurance between BMT and insurance companies, the Islamic Economic Society (MES) actively held business matching events which were attended by dozens of BMT. Through these efforts, MES hopes to make Indonesian BMT aware that Islamic micro insurance is very important as a risk mitigation strategy for business customers.

Signs are everywhere in Asia that Islamic finance is expanding its frontiers. However, many Asian countries have yet to engage, while even those that have can still do much more to reap their benefits. Malaysia has been the biggest pioneer of the modern Islamic finance industry and dominates global sukuk issuance. Indonesia is another keen advocate of sukuk, both domestically and internationally, but has brought a much smaller $19bn worth of deals. Pakistan, Singapore, Brunei Darussalam and Hong Kong are also potential growth areas. Elsewhere, the market is at best in its nascent stages and very fractured. This, however, is seen as a cause for optimism by bankers.

Khazanah Nasional Bhd is reportedly considering selling as much as US$1bil (RM3.26bil) of dollar-denominated exchangeable sukuk. The state-owned entity is currently choosing banks for the potential offer. The notes will be exchangeable into shares of companies controlled by Khazanah. A decision hasn’t yet been made on which equities will be included in this offering. Khazanah also owns 39% of telecommunications company Axiata Group Bhd, the biggest shareholder. It has about RM103.5bil of assets, including a stake in CIMB Group Holdings Bhd. Khazanah’s sukuk is part of a gradual move to make the Malaysian stock market more liquid. Demand for this exchangeable sukuk is expected to be well-received.

Bangladesh Bank (BB) will introduce Shariah-based refinancing scheme for Small and Medium Enterprises (SMEs) and other thrust sectors, Governor Dr Atiur Rahman said. Referring to the Shariah compliant mode of refinance support from BB's Export Development Fund (EDF), the governor said introduction of similar Shariah compliant refinance support against SMEs and other thrust sector lending by Islamic banks is also underway. The central bank already issued guidelines for Islamic banking in Bangladesh using an approach that delegates to the Shariah-based financing community the self-regulation and oversight of its Shariah compliance practices.

Saudi Arabia-based Islamic Development Bank is seeking to boost trading in Shariah-compliant products by opening an office in Malaysia. The Islamic Cooperation for the Development of the Private Sector, a unit of IDB, got a license in February from the Southeast Asian nation’s central bank to start offering Islamic investment products in Kuala Lumpur. It will focus on money- market instruments, foreign exchange and sukuk, chief executive officer Khaled Mohamed Al-Aboodi said. It has hired two traders and will also act as an intermediary for business between Asia and the Middle East, he said. Islamic Cooperation plans to increase the team in Kuala Lumpur as and when needed, said Al- Aboodi. The recruits are now working on developing the infrastructure and building relationships with other banks in the region.

Syarikat Takaful Malaysia has announced a final single-tiered dividend of 40%, which its shareholders approved at its AGM on Tuesday. Takaful Malaysia posted record-breaking results for 2013 as profit after tax and zakat grew by 34% to RM134.4mil from RM100.1mil in the previous financial year, with return on equity at 25.9%. With the proposed final dividends, the total single tier dividends for 2013, including the two interims dividends paid during the year, will be 82%, and this translates into a dividend yield of 6.6% based on the company’s share closing price of RM12.40 as at April 21, 2014. Group managing director, Datuk Mohamed Hassan Kamil said the company’s ultimate goal was to outpace the market and to strengthen its image through various advertising channels and marketing activities.

Bank Islam Malaysia Bhd has reiterated its interest in the Indonesian Islamic banking market despite previous attempts at penetrating the world’s largest Muslim country seeing a dead-end. Managing director Datuk Seri Zukri Samat said Indonesia possessed tremendous prospects as the country, with a population of 240 million, is still underserved in the Islamic banking sector. Islamic banking penetration in Indonesia is about 3% to4%, whereby Malaysia is between 23% and 24%. There is a huge Muslim population in Indonesia but Islamic banking penetration is very low, certainly there is a lot of business opportunity there, he said.

The Islamic Financial Services Board (IFSB) successfully organised the 6th IFSB Seminar on Legal Issues in the Islamic Financial Services Industry (IFSI), themed "Innovation in Sukuk Securitisation and Islamic Hedging Instruments: Developments and Challenges" on 25 March 2014 in Brunei Darussalam. This Seminar is a part of the IFSB seminar series on legal issues in the Islamic financial services industry. Speakers shared their insights on the legal challenges faced by asset securitisation and Sukuk structuring. Moreover, discussions focused on the need for establishing international standards governing transactions of Islamic hedging instruments in order to reduce the legal uncertainty. In the last session, speakers discussed the Shari`ah governance structure and the role of Shari`ah supervisory boards in assisting the innovation and development of these evolving markets.

Maybank Islamic Bhd, a unit of Malaysia's Malayan Banking Bhd, has raised 1.5 billion ringgit ($458.65 million) with its first Basel III-compliant Islamic bond. The sukuk has a tenure of 10 years and was priced at 4.75 percent. It was oversubscribed by 2.9 times and increased in size from an initial plan for one billion ringgit. It is the first issuance under a 10 billion ringgit subordinated sukuk programme announced by the bank in March.

Malaysia-based International Islamic Liquidity Management Corp (IILM) will reissue $860 million of its three-month Islamic bond next week, after expanding its issuance programme to $1.35 billion in January. The auction of the three-month sukuk, rated A-1 by Standard and Poor's, will be conducted on Apr. 17. In February, the IILM sold $490 million worth of three-month paper, designed to meet a shortage of highly liquid, investment-grade financial instruments which Islamic banks can trade to manage their short-term funding needs.

Baitul Mal Wa Tamwil (BMT) is a microfinance institution in Indonesia that is a shariah compliant. It aims to develop micro and small business enterprise for the poor and economically marginalized sector in the society. BMT is a small financing institution which operates using mixed concepts of "Baitul Maal" and "Baitul Tamwil" with its target focused on the small business sector. By this concept, BMT also acts as Zakah institutions (Amil). BMT has been in operation since 1995 under the supervision of Incubation Center of Small Business (PINBUK). Since its establishment in 1995, around three million customers have obtained micro-financing from BMTs in Indonesia. At present, the role of BMT as an Islamic microfinance institution has become increasingly important, particularly regarding poverty alleviation in Indonesia.

RAM Ratings said the Malaysian Islamic banking industry’s assets have almost doubled in the last five years, expanding to RM423bil as at end-February 2014 and accounting for 21% of the banking system’s assets. Gross financing continued to outpace deposits last year. In terms of asset quality, RAM said the the Islamic banking system’s gross impaired-financing (GIF) ratio stood low at 1.4% as at end-February 2014. RAM noted Islamic banks in Malaysia are well capitalised, with common-equity tier-1, tier-1 and total capital ratios of 12.5%, 12.5% and 14.7%, respectively, as at end-February 2014. The gradual derecognition of Basel II securities as qualifying capital, besides being an alternative source of long-term funding, will support the issuance of Basel III-compliant capital instruments for Islamic banks in Malaysia.

Etiqa Takaful Bhd, Malaysia's largest Islamic insurance provider and a unit of Malayan Banking Bhd, will issue a sukuk to raise 300 million Malaysian ringgit ($91.39 million). Etiqa is supported by a strong liquidity position although its family takaful business has seen poor growth due to unattractive pricing and a limited portfolio.

Thomson Reuters has released the Islamic Social Finance Report 2014 in collaboration with the Islamic Research and Training Institute (IRTI). The report is the first of its kind study covering Islamic social finance across countries in South and Southeast Asia with sizeable Muslim populations including Indonesia, India, Pakistan, Bangladesh, Malaysia, Singapore and Brunei Darussalam. According to the report, Islamic social funds could potentially meet resource shortfalls to alleviate widespread poverty in those countries. The potential of Islamic social funds remains unrealized as actual Zakah and returns of Awqaf are not fully utilized in most countries. Additionally, there is no Islamic microfinance industry in most countries, which further diminishes the optimal potential of Islamic social finance.

The Securities Commission Malaysia (SC) and the Oxford Centre for Islamic Studies (OCIS) co-hosted the 5th annual Roundtable on Islamic Finance in Kuala Lumpur on March 22 and 23. The roundtable, themed ’Harnessing Waqf Into a Bankable Social Financing and Investment Asset Class’ discussed the development of waqf and how it can contribute towards broadening the Islamic finance industry globally. Industry practitioners and scholars from around the world gathered to discuss challenges and potential of waqf in the philanthropic spheres, including issues of legislation, governance and professionalism, and capital. The global effort to harness Waqf into a bankable social financing and investment asset class is also in line with the SC’s strategy to identify new growth segments to further internationalise Malaysia.