IslamicFinance.de

Khazanah Nasional Bhd., Malaysia’s state investment company, selected CIMB Group Holdings Bhd. (CIMB), Deutsche Bank AG (DBK) and Standard Chartered Plc (STAN) to help arrange a sale of $1 billion of convertible Islamic bonds. Khazanah could raise $500 million to $1 billion, though a final decision on whether to proceed has yet to be made. The sukuk would be exchangeable into shares of companies controlled by Khazanah. No decision has been made on which companies’ shares would back the Islamic bond.

Islamic Development Bank plans to grant Kyrgyzstan $17.5 million for implementation of the Sustainable Villages Development Programme. The draft agreement between the Islamic Development Bank and the Kyrgyz government was approved by the Committee for Foreign Affairs on April 22. For the first stage of the project there will be allotted $9 millions, $6 millions of which is to be given by IDB; and $3 millions will be allocated for the second stage by the Islamic Solidarity Fund.

Indonesian syariah lender PT Bank Muamalat Indonesia Syariah aims to raise up to US$300 million (RM912 million) through an initial public offering of at least 20 per cent of its capital. The IPO, subject to approval by the market regulator, is expected by the second quarter of this year and will make Muamalat the first syariah bank to list on the Indonesian stock exchange. Bank Muamalat has 2.5 million customers. Indonesia is expected to host several IPOs this year as companies look to tap excess liquidity in the stock market, which reached an all-time high this week.

Insurance group Great Eastern Holdings Ltd has no plans for merger and acquisition activities (M&A) as the valuations are high, according to its group chief executive officer Chris Wei. However, the company is closely watching the market. Wei added that the lofty offer prices were underpinned by multiple reasons, aptly that Asia being one of the most attractive markets compared with Europe and the United States, hence, attracting foreign capital. He said the group would continue to grow responsibly and further strengthen its position as a life company rather than just a life insurance company by promoting health in the communities it operated in.

The Islamic Development Bank (IDB) is reviewing the government's recent measures on the Padma Bridge Project to take a decision on revival of its committed funding support for it. As part of the original deal, it was supposed to to provide US$ 140 million for the approach road on the bridge's Jajira side. The ministry of finance is hopeful of getting the fund from the lender. However, IDB is observing what steps the government takes on the main bridge construction and river training work. So far, the project has not yet matured enough for IDB to reconsider its decision on it.

The 2nd Joint District Judge Court, Dhaka has given its verdict on Social Islami Bank Ltd's plea to dispose off the entire shares and delist the names of Islamic Charitable Society and Shahir Abdulraouf Batterjee from the bank's Share Register Book. The order depicts that the Islamic Charitable Society and Shahir Abdulraouf Batterjee being banned and non-existent entity, and hence, SIBL is entitled to sell the aforesaid shares and deposit the sale proceeds thereof in the special reserve account / suspense account. The Court also empowered SIBL to delete the names of both Islamic Charitable Society and Shahir Abdulraouf Batterjee from the bank's Share Register Book after selling of the aforesaid shares.

The Kuala Lumpur-based International Islamic Liquidity Management Corp (IILM) plans to issue $500 million through its sukuk programme in the second quarter of this year. The long-awaited announcement was overshadowed by the unexpected pull-out of Saudi central bank, selling its shareholding to Qatar and Malaysia. According to industry executives, the pull-out would not necessarily deter Saudi commercial banks from buying the IILM sukuk - and that even if it did, demand in other countries would be more than ample. A key factor will be the yield that the IILM sukuk pays versus the cost of funds at individual banks.

The report “State of Social Performance in Nepal” from the US-based Microfinance Information Exchange (MIX) examines the social performance (SP) of microfinance institutions (MFIs) in Nepal. The report notes that the biggest SP management challenge facing the 37 Nepali MFIs is that of tracking outcomes related to institutions’ development goals. The report “Trends in Sharia-Compliant Financial Inclusion” presents an analysis of recent advancements in Sharia-compliant financial inclusion as well as challenges inhibiting its further expansion. Finding sustainable Islamic models could be the key to providing financial access to millions of poor Muslims. In the report “Private Sector Development Solutions – Jobs”, the International Finance Corporation (IFC) argues that good jobs provide a clear pathway out of poverty. Because 60 percent of the developing world’s current jobs are in micro-, small and medium-sized enterprises, the authors highlight the need for enhanced access to finance to allow for more investment and growth.

The Malaysian government is encouraging takaful operators to invest abroad in order to internationalise its Islamic finance industry. Takaful operators will be allowed to invest abroad without limit, lifting a requirement for them to hold at least 80 percent of assets locally. However, Takaful firms in the country are usually reluctant to invest abroad due to a low risk appetite and lack of expertise. Furthermore, the domestic focus is partly due to ample supplies of sukuk in Malaysia. Another obstacle to internationalisation is the meagre experience of some Malaysian takaful firms. Dependence on local assets, however, has come at a price, with many takaful firms missing their target returns.

The Board of Gatehouse Bank has announced its expansion in South East Asia to cement its growing operations and to ensure its proximity with its key clients, regulators and stakeholders in the region. This follows on from the £165 million acquisition of the law firm SJ Berwin’s offices in London, in collaboration with a Malaysian Sovereign Wealth fund in September 2012. Richard Thomas OBE, will relinquish his current responsibilities as Chief Executive Officer and will take over a new role with the Bank to spearhead this SE Asia business expansion and operations. Mr Fahed Boodai, Chairman has been appointed as interim Chief Executive Officer.

The Islamic Development Bank (IDB) will set up its country office in Dhaka, Bangladesh soon, according to its President Ahmad Mohamed Ali Al-Madani. Foreign Minister of Bangladesh, Dipu Moni, expressed satisfaction at the progress made with the Member Country Partnership Strategy (MCPS) for 2013-16 covering a number of important infrastructural, agricultural and human development projects. She also hoped that IDB would support several projects in the country. The IDB President assured of growing cooperation in power generation, including rural electrification and renewable energy use. He also shared his optimism about Bangladesh’s development pursuits to become a middle income country by 2021.

The Kerala State Industrial Development Corporation (KSIDC) has partnered with Cheraman Financial Services Limited, a Kochi-based Islamic fund. KSIDC has 11 per cent share in the Rs. 250 crore fund which is a shariah-based entity aimed at funding selected sectors. Cheraman is the new avatar of the Al Baraka fund proposed by KSIDC two years ago. Cheraman has received the go-ahead from the Securities and Exchange Board of India (SEBI) and has been registered as a trust, despite the Reserve Bank of India stating that the Banking Regulation Act did not permit Islamic banking in the country.

Banks in the United Kingdom and the United States are not accepting transactions made through the Islami Bank Bangladesh Limited after allegations surfaced about its alleged funding of militant groups across the globe. The matter came to light when a team of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) met the central bank Governor. According to BGMEA, banks in the United Kingdom and the United States are not accepting export bills and documents through the Islami Bank Bangladesh. Apparel sector’s apex body has requested Bangladesh Bank Governor Atiur Rahman to resolve the issue, saying many of its members were facing troubles. The bank posted a clarification on its website and denied the charges.

The Financial Services Act (FSA) and Islamic Financial Services Act (IFSA) which are expected to come into force by the middle of this year, would require composite insurers and takaful players to split their life and general insurance businesses under separate licences. Takaful Malaysia group managing director Datuk Mohamed Hassan Kamil said the Act would have an impact not only on talent hiring but also on retaining the existing talent, and would lead to staff pinching, resulting in higher wages but little improvement in productivity and efficiency. According to analysts, the impact would be felt more by takaful operators due to the higher number of composite or dual licences issued to them compared with conventional insurers.

The company owning the "Chaichana Halal" beef-noodle franchise has filed a lawsuit against Islamic Bank of Thailand manager Thanin Angsuwarangsi at Bangkok's Ratchadapisek Criminal Court yesterday. This was after the manager allegedly failed to approve loans for its franchisees, despite signing a previous MoU agreeing to loan cash to 50,000 franchise applicants over five years. Chana Rattanapakdi, executive of Tha Pisut International that owns the franchise business, accused Thanin of abusing his authority and causing damage to others according to the Criminal Code's Article 157. The court will hear the case on July 15 at 1.30pm.

The International Bank of Azerbaijan has announced provision of new services to clients through the first and so far only "Islamic window" in Azerbaijan. A range of services offered by the bank includes such products of Islamic banking as Ijara, Vakala deposit, Islamic bank cards, and opening of Gard Hassan accounts. All procedures and documentation on these types of services meet the standards assigned by the Islamic financial regulator AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions).It is planned to introduce in the banking legislation the concept of Islamic banking.

KLCC Property Holdings (KLCCP) expects its KLCCP Stapled Group, the first shariah-compliant stapled real estate investment trust (REIT), to become one of the largest property groups in Asia with a market capitalisation of RM12 billion. Chief Executive Officer Hashim Wahir said the KLCC REIT will house three properties - Petronas Twin Towers, Menara 3 Petronas and Menara ExxonMobil. The stapled REIT which is the KLCCP shares and KLCC REIT unit will be stapled and will be traded as one security on the Bursa Securities. Upon completion of the restructuring, KLCCP shareholders will own shares and units in KLCCP and KLCC REIT respectively.

Ng Nam Sin, Assistant Managing Director of the Monetary Authority of Singapore (MAS), pointed out that, despite the expiry of certain tax incentives, Singapore is still looking to develop the city's Islamic finance capabilities. To ensure that level playing field between Islamic finance and conventional financial products, Islamic finance activities will continue to be incentivized alongside conventional finance activities under Singapore's other existing schemes. However, others have remarked that Singapore is now lagging behind Malaysia, which is establishing itself as the major Islamic financial hub in the region.

Gatehouse Bank announced its expansion in South East Asia following the acquisition of the law firm SJ Berwin's offices in London, in collaboration with a flourishing Malaysian Sovereign Wealth fund in September 2012. Richard Thomas OBE, will relinquish his current responsibilities as Chief Executive Officer and will take over a new role with the Bank to spearhead this SE Asia business expansion and operations. Mr Fahed Boodai, Chairman has been appointed as interim Chief Executive Officer.

Kuala Lumpur-based International Islamic Liquidity Management Corporation (IILM) announced its inaugural short-term sukuk programme aimed at addressing liquidity challenges faced by Institutions that offer Islamic Financial Services. The launch of the programme is pursuant to the granting of an A-1 public rating by Standard & Poor’s Rating Services. The completion of this phase of the programme paves the way for the issuance of the IILM inaugural sukuk which is expected to take place in the second quarter 2013. The sukuk programme will be the first Shariah-compliant US dollar denominated financial instrument in the market to be issued at maturities of up to one year.