IslamicFinance.de

Bank Islam Malaysia Bhd announced the suspension of chief economist Azrul Azwar Ahmad Tajudin for allegedly breaching the bank’s internal policies. Azrul predicted at a forum in Singapore last week that Prime Minister Najib Razak will not win the upcoming general election in Malaysia. In a statement, the bank explained that the nature of the breaches would be established as soon as the investigations are completed. They further stressed that the suspension had no relation to Azrul's voicing his personal political views. It was reiteratively said that Azrul’s political views and his comments should are not to be associated with the bank.

The chief economist of Bank Islam Malaysia Bhd was suspended from his duties because of his prediction that the opposition would win the upcoming general election. He confirmed that he was fully aware that he was putting his position at the bank on risk. Kajian Politik untuk Perubahan (KPRU) urged in a statement to lift the suspension because it contradicts the right to freedom of speech of the bank's employees. However, the response of Bank Islam was that according to their policy any employee including management, if they behave irrespectively of their position, will be suspended with full pay, to facilitate investigation.

Last year the Financial Services and the Treasury Bureau presented feedback on the consultation on the amendments which were proposed aiming to ease development of an Islamic bond in Hong Kong. The government of Hong Kong has a long-standing policy initiative to develop Islamic finance in the city. As a part of it, the bureau sent out a consultation paper containing detailed proposals for the amendment of relevant tax-related legislation. The key part of the proposal states that a level playing field needs to be created to enable Islamic finance products to be structured in Hong Kong.

According to research by Kuwait Finance House, the total of sukuk issuance by end of 2012 has amounted to $131bn. This is an increase of 54% compared to 2011. The total sukuk issuance in December is $8bn marking a 61% increase in comparison with the previous year. Malaysia is the country which issued the most sukuk, followed by Saudi Arabia, the UAE, and Indonesia.

Recently, the president of Iraq - Jalal Talibani - gave his apprval to the new law establishing a state-owned Islamic bank. The name of the bank is "The Islamic Bank of Mesopotamia." According to the law, the bank starts with an initial working capital of 50 billion Iraqi dinars (about $43 million). Resources developed by the bank itself can later be used to raise that sum. The law further states that the purpose of the bank is to provide financial and banking services which are to be in accordance with Islamic shari'a and the development of the Iraqi economy. The law marks the first public effort of the country's government to enter into the rapidly developing and expanding field of Islamic finance.

According to Fitch Ratings, the growth of sukuk issuance in 2013 will be ensured by strong demand, mainly in originator-backed (asset-based) sukuk structures. Expectations for 2012 global sukuk issuances are for them to reach USD121b. This is an increase of 62% compared to the USD84.4bn the year before. At the moment Malaysia is the only country where sukuk rating is mandatory. The rating is considered to play a significant part in improving the confidence in this growing instrument.

Islamic banking and loans without interest are the key to Indonesia's growth in the field of Islamic finance. A good example of such loans is the story of 50-year-old widow Nur Hanifah, who took out a Shariah-compliant loan from Bank Muamalat Indonesia in order to help finance a store on the ground floor of a shophouse. She does not pay interest but instead she must give the bank a certain percentage of her profit plus part of the principal each month. The percentage usually is about 40%. Hanifah explains that even when times are bad, she does not have any financial worries because then she does not have to pay anything compared to times when she has good profit.

Responsibilities:
· Formulate strategies and identify prospective customers according to the target market
· Solisitasi process and collection of funds
· Implement training and monitoring of financial activities depositors
· Fostering and maintaining good relationships with customers on the basis of mutual respect, especially a good and profitable customers

To develop, review and enhance:
· Credit Risk Policy (CRP)
· Guidelines to CRP (GCRP) in line with CAFIB, Basel II / IFSB requirements and BNM's Best Practice guidelines.
· To monitor and track compliance by business units and other relevant support departments to the bank's credit risk policies.

Requirements:
· S1 Accounting Programs
· Male Maximum age 27 years

[...]

Role:

• Provide expert advice and support to Head, Islamic Banking in relation to Islamic Banking’s financial position and control.
• Ensure that the organisation delivers reasonable returns on shareholders’ capital.
• Understand the needs and functions of Islamic Banking SBUs/SFUs to develop an effective management information system to support the Bank’s goals.
• Oversee the SBU/SFU financial reporting needs and requirements and provide timely and accurate financial information to aid decision making.
• Ensure appropriate cascading of business targets to the SBU.
• Strategic planning and control to help achieve financial goals and targets of the SBU.

[...]

Sime Darby Bhd has been approved by the Securities Commission for its proposed US$1.5bil multi-currency sukuk issuance programme. The programme is seen as a significant landmark since it is first internationally rated multi-currency syariah-compliant sukuk programme by an Asian corporate. The ratings of Sime are A, A and A3 by Standard & Poor's Rating Services, Fitch Ratings Ltd and Moody's Investor Service, Inc.

Takaful Ikhlas Sdn Bhd has appointed a new chief executive officer of the general and family takaful company - Ab Latiff Abu Bakar. The appointment became effective on January 7th 2013. Latiff has a Bachelor Degree in Business Administration from the University of Portland, USA. He has furthermore over 20 years of experience in the field including senior management positions in insurance and takaful companies. Before joining Takaful Ikhlas, he was head of takaful in an international insurance company.

DanaInfra Nasional Bhd's RM300 million sukuk aiming to partially fund the Klang Valley’s mass rapid transit (MRT) will make its kick-start retail trading of bonds on Bursa Malaysia. Moreover, it is likely that the sukuk will attract he issuance of private debt securities such as conventional bonds and Malaysian Government Securities (MGS) which will be publicly available. According to Tajuddin Atan - CEO of Bursa Malaysia Bhd - a number of parties have expressed their interest in issuing retail bonds. In addition, there should be ample amount of issuance for the successful trading of these bonds on the local exchange.

The first exchange traded bonds and Sukuk (ETBS) has been launched on Tuesday. The sukuk was launched by Prime Minister Datuk Seri Najib Tun Razak, who explained that the retail offering would make it possible for citizens to have a stake in the country's success. Danainfra Nasional Bhd is allocating as much as RM300mil under this issuance. The initial tranche will be used to fund the first phase of the MRT Kajang to Sungai Buloh line.

Syarikat Prasarana Negara plans to sell sukuk worth up to RM6 billion this year in order to fund infrastructure projects. Moreover, it is set to list its rail unit, Rapid Rail Sdn Bhd, on the local bourse by 2018 to mark further expansion in the company. The unit will be listed as soon as the Mass Rapid Transit (MRT) rail project is completed, which is scheduled for 2017.

Over the years, Malaysia has become a leader in Islamic finance and the world’s most important Islamic-finance centre. A little more than a fifth of the country’s banking system in terms of assets is compliant to the principles of Sharia. Compared to that, in Muslim countries the average percentage is about 12% or even a lot less. On the global sukuk market, Malaysia occupies a dominating position. In the first three quarters of last year, the country was responsible for almost three-quarters of total global issuance. In addition, an international standard-setting body - the Islamic Financial Services Board - is situated in Malaysia.

CIMB Group Holdings Bhd received its underwriting for global and local sukuk issuance fall in 2012. Meanwhile, the market share of HSBC Bank plc grew significantly during the same period. The total issuance for global sukuk of CIMB fell from US$7.77 billion in 2011 to US$6.21 billion (RM18.82 billion). As a result, its ranking dropped to second place and its market share eased to 12% from 17.7% in 2012. HSBC reached first place with total global issuance increasing to US$11.35 billion from US$4.88 billion in 2011. Its market share rosealmost double to 21.9% from 11.1% in 2011.

2013 is the 38th year for the global Islamic banking industry in its contemporary phase. The start of the new year is filled with invigorated optimism, partly due to its continued proliferation in new markets, particularly in Oman and Arab Spring countries. Another reason for the optimistic attitude is the impressive momentum of the sukuk market. However, the Islamic finance industry tends to be beguiled by its own relative success largely because of the absence of independent evaluation of its performance and policy and architectural development.

According to a report by Kuwait Finance House (KFH), over a period of five years Hong Kong managed to establish Islamic Shariah compliant organizations, authorities, products and services. There is high potential for Islamic banking in Hong Kong due to Hong Kong's high liquidity, free economy, strong presence of foreign banks and simple taxes' system. Thus, it is a great candidate to become a major Islamic financial hub.