IslamicFinance.de

The first Islamic arbitration rules in the world were introduced last month by the Kuala Lumpur Regional Centre for Arbitration (KLRCA). They are expected to enable further expansion of Islamic finance with total global assets. The value of the assets is now estimated to lie between US$1.2 trillion (RM3.72 trillion) to US$1.3 trillion (RM4.03 trillion). The new rules concern conventional as well as syariah-compliant commercial transactions and contracts. With the new rules, a complete syariah-compliant process for relevant parties to a dispute is possible.

During the first eight months of this year, total sukuk issuance in Malaysia reached RM219.4bil compared with RM120.7bil during the same period in 2011. In 2012, the Islamic capital market showed encouraging performance. Moreover, the sukuk area was able to register a record in total issuance value. The Islamic equity segment was bolstered thanks to Felda Global Ventures Holdings Bhd and IHH Healthcare Bhd. The growth tendency of the Islamic capital market is true not only for Malaysia but worldwide as well.

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MNRB Holdings Bhd has planned the launch of a Sukuk Mudharabah programme worth up to RM150mil. At the same time, the company has secured a RM200mil revolving credit-i facility from Standard Chartered Saadiq Bhd. According to the reinsurer, RM120mil will be used for refinancing the short-term revolving credit facility maturing on December 10th 2012. The remaining money will flow into the group's general working capital. The Sukuk programme has a five-year tenure and will be issued without a prospectus via direct placement.

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Bank Negara has given its consent on negotiations between BIMB Holdings Bhd on one side and Dubai Financial Group LLC (DFG) and Lembaga Tabung Haji (LTH) on the other on the topic of BIMB Holdings Bhd's proposal to acquire DFG's stake in Bank Islam Malaysia Bhd. The negotiations are to be competed no later than March 31, 2013. According to BIMB, all partiesfirst need to receive approval from the Minister of Finance before entering into any agreement.

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The Islamic capital market is prospering as the current growing expectations are rising. But in order to progress the industry, there must be strong governance, disclosure, proper due diligence, transparency, ethics, and corporate as well as social responsibility. It is also necessary to promote the syariah-based approach and increase international cooperation on syariah research and product development as well.

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According to Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz, there is more renminbi financing in the pipeline after the two issuances of offshore yuan sukuk out of Malaysia and a yuan bond issuance by Malaysian corporations. She said that the reason for this was that there was greater potential to raise funds in the currency, especially investments in China.

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The second tranche of Malaysia Airlines' (MAS) junior Sukuk of RM500mil has been issued. Its role is to provide working capital and refinancing of existing borrowings. According to MAS, the junior Sukuk has a semi-annual profit rate of 6.90% a year up to the tenth year.

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The expextations for the next three years are for global Islamic finance assets to grow between 10% and 15% a year. They will be supported by strong demand and supply factors as well as effective regulation and quality of services. Since the number of banks that offer Islamic finance and profit and loss sharing products is continually increasing, competition will contribute to the assets' growth.

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After legal proceedings were lobbed at Dubai Group over its US$10bil debt, the question arose what can be expected regarding the 30.5% interest it held in Bank Islam, where 51% of it belongs to BIMB. It is suggested that BIMB may acquire the stake from the Dubai state investment vehicle. In this way it will gain practically full control of Bank Islam. A notable fact is that BIMB as well as Bank Islam share a common shareholder pilgrim fund Lembaga Tabung Haji, which owns 51.76% of the former and 18.5% of the latter.

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According to leaders in the area of real estate investment, Malaysian real estate investment trusts show a positive developmen this year. The strong returns which Axis REIT Managers Bhd provided over the past year include Al-Hadharah Boustead REIT, Al-Aqar Healthcare REIT, Pavilion REIT, CapitaMalls Malaysia Trust, Axis REIT, Starhill REIT and Tower REIT. A further positive development is expected.

Celcom has successful floated its sukuk issuance of RM5bil in nominal value, of which RM3bil received a final book. Celekom's officials also confirmed yesterday that their RM3bil sukuk has met with strong demand from asset management companies, financial institutions, insurance companies and corporate organisations.

Syarikat Takaful's profit soars to RM22.58mil. This is mainly due to higher sales generated by family products and improved investment income. The company's outlook for the current year is encouraging despite increasing competition on the market.

Malaysia’s competitive advantage in Islamic finance will strengthen as the country evolves into an international hub for Islamic finance.

The country’s existing Islamic banking players remain unfazed by the upcoming competition in the form of more licences to be issued for world-class Islamic banks and takaful operators. CIMB Islamic Bank Bhd executive director and chief executive officer Badlisyah Abdul Ghani said the move would result in a greater variety of syariah-based financial services and products being offered to the public.

Najib said the 1MDB Foundation would also consider offering scholarships for students wanting to pursue other strategic and important fields like Islamic finance and banking.

Asean member countries must have a minister to promote and champion the grouping’s causes within each country as the region moves towards integration by 2015, CIMB group chief executive Datuk Seri Nazir Tun Razak said

Sime Darby Bhd yesterday listed its Ringgit Malaysia Sukuk Programme on Bursa Malaysia with a combined master limit of RM4.5bil under the Exempt Regime.

Bank Islam Malaysia Bhd is expanding its corporate investment banking business to include initial public offerings (IPOs) as part of its expansion drive.

Yap Leng Kuen reported in the The Star that the International search firm Egon Zehnder International has been appointed to find a replacement for former EON Bank CEO Albert Lau Yiong.