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India's Ministry of Minority Affairs has enlisted a Kuala Lumpur-based body to help develop Islamic endowments, or awqaf, aiming to mobilise a large pool of assets in the country. India, with an estimated 177 million Muslims, has a large base of awqaf but many of their assets are far from being employed efficiently; their estimated annual income is just 1.63 billion rupees ($26.3 million). The World Islamic Economic Forum Foundation will hold a roundtable later this year to discuss ways to improve management of India's estimated 490,000 waqf properties. However, efforts to strengthen Islamic finance in India have in the past met strong opposition from bureaucrats in the finance ministry and banking circles.

The sharia compliant arm of Malaysia-based Public Bank has submitted a proposal to the central bank for a 5 billion ringgit ($1.5 billion) Basel-III compliant Islamic bond program. Public Islamic Bank, a wholly-owned unit of Public Bank, may emerge as the third issuer of Basel III compliant sukuk. AmIslamic, which established a Basel III compliant sukuk program for 3 billion ringgit on Feb 13, sold 200 million ringgit on Wednesday. RHB Capital received approval from the securities commission for a similar 1 billion ringgit program earlier this month. Besides, the country's conventional banks have begun issuing Basel III bonds; Public Bank issued medium-term notes worth 1 billion Malaysian ringgit last September.

he High Court fixed case management on March 18 to allow possible settlement between Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim and Bank Islam Malaysia over two suits linked to a RM66.67 million loan to purchase Guthrie shares 13 years ago. According to Khalid's counsel S. Selvarajah, his client and Bank Islam are seeking to reach a global settlement over the matter. In 2007, Khalid had filed a suit against the bank to seek a declaration that the Al-Bai Bithaman Ajil(BBA) facility entered between them in 2001 was null and void. Khalid also sought a declaration that Bank Islam had breached the collateral contract and the BBA facility. Bank Islam then countersued Khalid, claiming that Khalid had breached its contract in the loan agreement over his purchase of the Guthrie shares.

Growth in Asia’s foreign-currency sukuk issuance is being hindered by capital controls, leaving the Persian Gulf dominating a market that exceeded $17 billion in the past two years. Malaysia’s central bank requires local companies seeking to sell overseas bonds to show a legitimate funding need to reduce currency speculation. In Indonesia, corporations must supply information on the potential foreign-exchange risk, whether they intend to hedge, as well as their dollar and rupiah cash flows under rules put in place by the Financial Services Authority in 2002. This is because Malaysia and Indonesia want to protect their reputation and ensure that issuers won’t default on foreign-currency debt.

The theme for this 2014 Summit is New Markets and Frontiers for Islamic Finance: Innovation and the Regulatory Perimeter.

Please refer to http://www.ifsb.org/preess_full.php?id=240&submit=more for the announcement of the 11th IFSB Summit.

For any queries regarding the Summit, please contact the secretariat:

- Participants' registration

Ms. Yazmin Aziz at yazmin@ifsb.org

Mrs. Ida Shafinaz Ab. Malek at ida.shafinaz@ifsb.org

- Sponsorship and Media

Ms. Rosmawatie Abdul Halim at rosmawatie@ifsb.org

INVITATION TO A RESEARCH INQUIRY
Anti-Terrorism Legislation and Impact in Cross Border Giving

The World Congress of Muslim Philanthropy’s Academy of Philanthropy is leading a research inquiry in collaboration with Cass Business School’s Centre for Charity Effectiveness. After London and Doha, the last of the three dialogues will take place in New York.

This concerns the barriers to giving for international development and relief that affect donors and recipients alike, in the light of continuing international agreements and practices enshrined in legislation. Our work is seeking to identify ways forward for international dialogues to best support and enhance accountable giving and its efficient flow between nations. The findings of the research will be reported to the WCMP’s biennial Global Donor’s Forum, to be held in Washington, DC from April 14-16, 2014.

Donors, nonprofit and development sector representatives, and financial institution executives are welcomed to participate in the dialogue and share their experiences and offer suggestions.

Tuesday, March 4, 2014 - 10.00 am to 4.00 pm
Organization of Islamic Cooperation (OIC) Observer Mission to the UN

Export-Import Bank Malaysia (Exim Bank) has established a RM3.3 billion (US$1 billion) Multicurrency Sukuk Issuance Programme under the special purpose vehicle, Export- Import Sukuk Malaysia. On Feb 19, 2014, the first sukuk series from the programme was issued. A hybrid structure was decided upon on the basis of wakala principle. The Exim Bank sukuk received strong investor demand. It was oversubscribed by approximately 10 times attracting approximately US$3.2 billion orders. The strong demand from the investors allowed the sukuk to be priced at the tighter end of final price guidance at T+140 bps following an initial price guidance of T+165 bps area, which is equivalent to an all-in yield of 2.87% per annum.

Indonesia is facing tough economic challenges and a period of political uncertainty. In this climate, Indonesia needs to restore foreign investors’ trust and redirect their attention to its strong fundamentals: a politically stable country with the world’s fourth largest population and a young and growing consumer base. One fundamental step to restoring this trust and raising Indonesia’s standing as an attractive investment destination is to shore up the private sector’s corporate governance practices. Indonesian companies can build trust by protecting the rights of shareholders and honoring their obligations to staff, investors, suppliers and local communities. They should also institute a competent and independent board that can review management decisions.

Companies selling takaful in Indonesia are boosting agent numbers and product ranges ahead of a new rule that will require them to be run independently. Indonesia is so far dominated by takaful "windows" which allow insurers to offer Islamic and conventional products side by side. However, a new law requiring takaful firms to be spun off into stand-alone businesses is expected this year. Operating costs are expected to triple when the takaful business is spun off. Takaful firms have also begun to explore new streams of revenue in market segments that remain relatively untapped, like savings products for pilgrimages to Mecca. Moreover, agents are branching out into Indonesia's rural areas, moving beyond markets already crowded with conventional players.

Fitch Ratings has assigned Export Import Bank of Malaysia's (MEXIM) USD300m 2.874% sukuk due 2019 a final rating of 'A-'. The Islamic bonds are issued under MEXIM's USD1bn multi-currency sukuk programme established through EXIM Sukuk Malaysia. The sukuk rating is the same as MEXIM's Long-Term Issuer Default Rating (IDR). EXIM Sukuk Malaysia, a special purpose vehicle (SPV) incorporated solely to facilitate sukuk issues, will use the sukuk proceeds to purchase eligible assets from MEXIM. However, any deterioration in the Malaysian sovereign's creditworthiness and ratings or in the government's propensity to support MEXIM would hurt the IDR and hence the sukuk rating.

AmIslamic Bank, subsidiary of AMMB Holdings, has received the necessary approvals from both Bank Negara Malaysia and the Securities Commission of Malaysia to set up a subordinated Sukuk Murabahah programme with a value of RM3bn. The subordinated Sukuk Murabahah programme has a tenor of up to 30 years from the date of issue and each tranche will have a tenor of five years minimum. In a market filing the issuer said that RAM Rating Services had assigned a preliminary long-term rating of 'AA3' to the Subordinated Sukuk Murabahah under the programme.

The Malaysia-based International Islamic Liquidity Management Corp (IILM) will issue a $490 million 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 Feb. 25. Last month, the IILM sold $860 million worth of three-month paper, designed to meet a shortage of highly liquid, investment-grade financial instruments for the short-term funding needs of Islamic banks. Since the programme's launch, primary dealers have held on to the IILM instruments after auction and there has been little if any secondary market trade in them.

Brunei will introduce new guidelines for its takaful sector by June, in order to standardise the way agents are managed by firms. The guidelines will regulate commission rates payable to agents and the qualifications required for them to sell takaful products, Osman Jair, chairman of industry body Brunei Insurance & Takaful Association (BITA) said. An inter-company agreement will be signed, so companies will be better disciplined and the correct treatment of agents ensured. The impending guidelines are being reviewed by industry consultants and Autoriti Monetari Brunei Darussalam (AMBD), the country's central bank.

Indonesia has a history of high inflation and a dependence on foreign capital. The Indonesian Rupiah was Asia’s worst performing emerging market currency in 2013. But Indonesia is also the world’s most populous Muslim nation. In order to reduce its reliance on other economies, the country’s religious ministry has built up $5.4 billion in reserves from deposits made by the millions of its citizens seeking to make the pilgrimage, or Hajj, to Saudi Arabia each year. Last year, the Hajj department began to invest in Sharia compliant bonds issued by the Indonesian government. Like its neighbor Malaysia, the country is now setting up a Hajj financial management agency, which could realistically play a key role in developing the country’s Islamic finance markets and reduce its reliance on offshore funds.

American International Group Inc. is plotting its entry into Malaysia’s Islamic insurance market, lured by the country’s economic expansion and an industry that has grown more than fivefold in less than a decade. The insurer will start a Shariah-compliant reinsurance business by June and may eventually offer a fuller range of services, Antony Lee, chief executive officer at AIG’s Malaysian unit, said. In line with the continuing expansion of the takaful business, the demand for retakaful is expected to expand between 15 percent and 20 percent on an annual basis. However, a key challenge for retakaful companies is their limited ability to compete with their larger non-Islamic counterparts for business that requires a bigger balance sheet.

Bank Islam Malaysia (Bank Islam) plans to open 141 branches nationwide by year-end. Managing director Datuk Seri Zukri Samat said the new branches will be opened at Jalan Chan Sow Lin in Kuala Lumpur; Bandar Enstek in Negeri Sembilan, Bukit Ibai in Trengganu, Sri Damansara, Puchong and in Johor. Nine more branches are planned for 2015. In addition to the bank's branch expansion, Zukri said Bank Islam has also enhanced its distribution channels by establishing five urban business centres, improve on internet banking and mobile banking services as well as provide more than 1,200 self-service terminals nationwide. Due to the new set of terms and conditions introduced by Bank Negara on loans, the bank suffered a 10 per cent decline in assets and loan performance.

AmIslamic Bank has obtained approval from the Securities Commission Malaysia to establish a subordinated sukuk murabaha programme of up to 3 billion ringgit (US$903.60 million), which would represent the first Basel III-compliant sukuk in Malaysia. AmIslamic is given the flexibility to issue subordinated sukuk murabaha during the availability period of the programme based on the bank's funding requirements. The AmIslamic programme has a tenor of up to 30 years from the date of the first issuance of the subordinated sukuk murabaha. Each tranche to be issued shall have a tenor of at least three years, subject to their maturing on or before the expiry of the programme. AmIslamic's sukuk murabaha is rated AA3 by RAM.

US-based Islamic stock fund manager Saturna Capital Corp is selling its first plan in Malaysia, betting that Southeast Asian equities will weather a global emerging-market rout. The company, which has US$4.1 billion (RM13.6 billion) of assets under management globally, wants to raise RM100 million in the Malaysian fund's first year. The vehicle will invest in syariah-compliant companies in the region, focusing on building-material, healthcare and consumer stocks. The new ringgit-denominated fund will target local and overseas high net worth individuals and institutional investors. The outlook for Islamic fund management in Malaysia is still good, after a constant growth at an average rate of 25 per cent a year since 2009.

After outsourcing its information technology (IT) infrastructure for about five years, Syarikat Takaful Malaysia has decided to bring it back inhouse. The company has adopted Microsoft System Center 2012 to manage its IT infrastructure and end-user computing. It said that the decision to go inhouse has shown immediate benefits, and it has been experiencing a 40 per cent improvement in response time and 27 per cent in cost reduction. Takaful’s adoption of Microsoft System Center was mainly helped by system integrator Redynamics Asia System Management. The cost savings the company achieved from going inhouse can now be used to help the company expand into other areas.

Panin Bank Syariah, the Islamic banking unit of Bank Panin Indonesia, plans to provide prospective hajj saving service for hajj and umrah. Managing Director of Panin Bank Syariah, Deny Hendrawati, said that company targeted hajj and umrah fund between 1 trillion to 1.5 trillion IDR from four thousand to five thousand customers. Panin Bank Syariah also develops its e-banking service. E-banking service is connected online to the Integrated Hajj Computerized System (Siskohat) at the Ministry of Religious Affairs. Hence, the customer's name who meets the minium saving will be automatically enlisted as a prospective hajj. According to central bank's new rule, Bank Panin Syariah can use its 500 parents' networks across Indonesia.