Asia

RBI’s efforts to stabilise rupee hit country’s forex reserves, experts say

A strong US dollar and subsequent interventions by the country’s central bank to stabilise the rupee drained over $1.80 billion (Dh6.61 billion) from India’s foreign exchange reserves. Reserves plunged by $1.82 billion during the week ended August 10 to $400.88 billion from $402.70 billion reported one week earlier. According to Anindya Banerjee, deputy vice-president of Kotak Securities, the decline in Forex reserves can be attributed to the RBI’s intervention to stem the decline in rupee’s fall. Foreign currency assets fell sharply, but the value of the country’s gold reserves increased by $145.6 million to $20.69 billion.

World’s first ESG #sukuk #fund another step forward for #Malaysia’s responsible finance

Malaysia’s Shariah-compliant BIMB Investment Management launched the world’s first environmental, social and governance (ESG) sukuk fund on August 1. BIMB’s ESG Sukuk Fund is the company’s fifth ESG-focused fund as a result of its partnership since 2015 with London-based Arabesque Asset Management. BIMB Investment CEO Najmuddin Mohd Lutfi said the company plans to launch more ESG that incorporates fintech like artificial intelligence, machine learning, big data, data analytics. The next investment focus could be in U.S. equity and multi-asset funds.

Which are the Sharia-compliant mutual #fund schemes in #India?

There are three Sharia-compliant mutual funds in India: Tata Ethical, Taurus Ethical and Reliance ETF Shariah BeES. The first two are actively-managed multi-cap schemes and Reliance ETF Sharia BeES is an exchange-traded fund (ETF) that invests in the Nifty50 Sharia Index.
There are also sectoral funds with investment in Reliance Pharma, ICICI Pru Pharma Healthcare & Diagnostics, SBI Technology Opportunities, ICICI Pru Technology or Franklin India Technology. However, these funds are vulnerable to cyclical fluctuations in their respective sector.

Waqfcoin: Crowdfunding Platform Uses Blockchain to Serve Humanity

Singapore-based fintech firm Finterra has developed a crowdfunding platform that uses blockchain to create smart contracts that would be linked to specific Waqf projects. Cash Waqf is a type of Waqf which is categorised as movable Waqf. It aims to promote service to mankind by establishing the endowment using money as opposed to using immovable assets. The idea of Waqfcoin lies on the principles of cash Waqf. Blockchain technology can be used to build trust in Waqf management and to ensure accountability. The technology could also provide a comprehensive global database on Waqf, which can be easily created and maintained in a transparent manner.

Creating footsteps in Kuwait’s Islamic banking sector

Kuwait Finance House (KFH) has embarked on a digital transformation journey. Kuwait and Bahrain have each launched their respective digital banking platforms and soon, Malaysia will have its own. By the end of 2018, a seamless digital customer experience is expected to be publicly available. In Malaysia the KFH is active in the infrastructure financing front, supporting the third light rail transport system (LRT 3) and the second Mass Rapid Transit (MRT 2) projects through the provision of Islamic financing facilities. The project is expected to benefit the local communities through the promotion of real estate developments around the proposed train stations. Furthermore, the project is expected to generate more than 2,000 jobs during the construction phase.

Cagamas issues RM825m 1-year bond and #sukuk

The National Mortgage Corp of Malaysia (Cagamas) has issued a RM825 million 1-year bond and sukuk comprising RM800 million Conventional Medium Term Notes (CMTN) and RM25 million Islamic Medium Term Notes (IMTN). Proceeds will be used to fund the purchase of mortgage and Islamic home loans. With this move the aggregate primary issuance by Cagamas has reached RM9.3 billion for 2018, marking a 24% increase in the company's primary supply as compared to 2017's year-to-date total of RM7.5 billion. Cagamas CEO Datuk Chung Chee Leong said the CMTN issue was concluded via reopening of an existing bond tranche which marked the company's second reopening exercise for the year.

Shariah investments continue growth spurt in SE Asia

According to the latest Cerulli Associates research, Shariah-compliant investments are gaining further ground in Asia. Growth continues to be concentrated in South-East Asia, with Malaysia remaining at the forefront with $28.4bn in Shariah mutual fund assets under management (AUM) in 2017. Last year, Malaysia’s Securities Commission launched a five-year blueprint to grow the sector. Indonesia grew its Shariah mutual fund market by 90% to nearly $2bn in AUM in 2017. Besides allowing Shariah funds to fully invest overseas, market regulator Otoritas Jasa Keuangan (OJK) recently introduced a framework requiring fund managers to carve out dedicated units to manage existing Shariah funds. The Cerulli survey shows that asset managers in the country expect demand for Shariah investments to come mostly from insurers and pensions over the next few years.

Dr M To Deliver Teleconference Address At Sarajevo Halal #Fair

Malaysian Prime Minister Tun Dr Mahathir Mohamad has agreed to deliver a keynote address, via teleconferencing, at the three-day Sarajevo Halal Fair. Bosna Bank International's CEO Amer Bukvic announced that the fair would begin on the 27. of September and he invited more Malaysian companies to set up business in Bosnia and Herzegovina. Bukvic added that the country aims to become Europe’s halal hub and they need help from Malaysia. The Sarajevo Halal Fair is jointly organised by Bosna Bank International, Saudi-based Islamic Development Bank and Islamic Development Bank Group Business Forum and supported by Malaysia’s Halal Industry Development Corporation.

Shariah #Fintech – A Case Study of #Indonesia

Fintech has permeated the Islamic banking industry and this development is particularly evident in Indonesia. In July 2018, the country's deputy finance minister Mardiasmo plugged the term "Shariah fintech" in reference to financial technology that is compliant with Islamic laws and beliefs. The market share of Islamic finance remains at less than 5% of the total finance and banking market. There is tremendous potential, but there are some impediments blocking its growth. One is the presumption that certain fintech tools might not be compliant with Shariah law. Cryptocurrency was initially deemed as a violation of Shariah principles. However, in April 2018, Muslim scholar Muhammad Abu-Bakar, released a study exploring the functionalities of Bitcoin, concluding that it did indeed meet the requirements. Indonesia’s OJK (Financial Services Authority) is releasing a new set of regulations to govern the country’s fintech scene, set to come into effect in August 2018. These rules will extend to Shariah-compliant fintech tools as well.

BNM introduces Rahn policy document

Bank Negara Malaysia (BNM) has issued the Rahn policy document which is aimed at strengthening the practice among Islamic financial institutions to offer services that are end-to-end Shariah-compliant. BNM stated that the subject matter of the Rahn contract shall be collateral that is recognised by Shariah and Shariah-compliant liability or obligation owing to the pledgee. It added that the collateral must be owned either by the obligor, a third party, or the obligor and a third party. BNM said the collateral shall be immediately possessed by the pledgee upon entering into the Rahn contract unless a pledgee approves a delay in possession. A Rahn contract is applicable with contracts including qard, murabahah, tawarruq, baiinah, istisna, ijarah, kafalah, mudarabah, musyarakah, wakalah bi al-istithmar, and wad as well as takaful coverage.

#Malaysia's use of Islamic bonds to fund deficit credit positive: Moody's

According to Moody's Investor Service, the Malaysian government is increasingly using longer-term Islamic instruments to fund its deficit to lower liquidity risk. The shift toward Islamic financial instruments is seen as credit positive for the sovereign. The Malaysian government has a sizable debt burden currently at 50.8% of the country's gross domestic product (GDP). The Malaysian Government Investment Issues (MGII), local currency, Shariah-compliant debt instruments, accounted for 50% of total federal government financing in 2017, up from a 26.4% share in 2008. The country's active participation in Islamic finance is part of Malaysia's broader vision to position itself as an international center for the instrument, and a recognized goal in the central bank's financial sector master plan.

BIMB Invest eyes RM100m for Shariah-ESG #fund within 1 year

BIMB Invest is expected to achieve a subscription of RM100 million of its BIMB-Arabesque ValueCAP Malaysia Shariah-ESG Equity Fund within a year. The fund was launched together with Arabesque Asset Management and ValueCAP and approved by the Securities Commission Malaysia. As the fund is mainly targeted at corporate and institutional investors, BIMB Invest is hoping to get the likes of pension funds, insurance and takaful firms on board. The fund will invest in about 100 local listed companies that are Shariah-compliant as well as in line with ESG practices. It will analyse the ESG factors of each company using Arabesque’s proprietary methodology, the Arabesque S-Ray, which daily assesses the performance of companies.

How Islamic finance can manage rupiah stability

According to the Jakarta Interbank Spot Dollar Rate, the rupiah dropped to a new low of 14,418 against the US dollar on July 3. In the last few weeks, all emerging markets showed an increase in foreign currency volatility. Since April 2018, there has been capital outflow from the Indonesian bond market amounting to almost US$1.9 billion. Solving this problem can be done in two steps. First, sensitivity to capital outflow must be reduced by reducing dependency toward it. Second, capital inflow is needed that is less sensitive to global externalities. Islamic finance may contribute to financial stability, as all transactions must be asset-backed. The principle of risk-sharing between counterparties will help prevent excessive risk-taking. Islamic finance can also help create rupiah stability through its various sharia-compliant instruments, which could attract global investors.

#Malaysia: BIMB Investment targets RM100m for Shariah equity fund

BIMB Investment is targeting RM100 million in subscription for its newly launched BIMB-Arabesque ValueCAP Malaysia Shariah-ESG Equity Fund. The fund will be invested in 100 local shariah compliant companies listed on Bursa Malaysia. BIMB Investment CEO Najmuddin Mohd Lutfi said the investments would be based on selected companies that have strong financial standing. He said companies who are interested to increase their social responsible investment (SRI) and Environmental, Social and Governance (ESG) portfolios should also tap into this fund.

Apply for Islamic Development Bank undergraduate scholarship by 21 August

The Islamic Development Bank (IDB) announced the availability of scholarships for Muslim Community in India to pursue undergraduate studies in India. The scholarship may cover tuition fees and/or monthly stipends, books & clothing allowance and medical coverage through public or university sponsored hospitals. Major fields at undergraduate level include Medicine, Dentistry, Pharmacy, Nursing, Engineering, Agriculture, Information Technology, Economics, Education, Psychology and Learning, Education Policy and International Development.

#Maldives launch first Islamic finance magazine: ‘Laaba’ to act as a platform to engage regional & global industry developments

Maldives Center for Islamic Finance (MCIF) has launched Laaba, the first publication in the archipelago dedicated to Islamic finance. The magazine aims to be the first platform in South Asia to bring together regional hubs with global partners in engaging knowledge and sharing ideas. The first issue has embraced the theme of responsible and ethical finance and how this is aligned with Islamic finance. Laaba also includes exclusive interviews with CEOs across Maldives financial institutions, including the Maldives Islamic Bank, Maldives Capital Markets Development Authority and Amana Takaful.

RHB Bank #Singapore seals world's largest Islamic hotel financing deal

RHB Bank's Singapore branch completed the world’s largest Islamic bilateral hotel financing deal with the Royal Group, for a five-star luxury hotel valued at S$300mil (RM888.72mil). RHB Bank explained the rarity value of this deal was that hospitality-related assets were used for Islamic financing, which in the past was considered taboo as not all income is deemed to be Shariah compliant. RHB Bank Singapore head of Islamic banking Nazmi Camalxaman said RHB Bank Singapore was focusing on a niche and targeted market for Islamic financing. He pointed out that for the first time in five years, the government is expected to launch a site for hotel rooms as part of its Government Land Sales (GLS) programme in September 2018 amid a positive tourism outlook.

A new term is born: Shariah #fintech, and it has quite some potential

#Indonesia’s Deputy Finance Minister Mardiasmo said at the third Annual Islamic Finance Conference that fintech will play an important role in Islamic finance. Shariah fintech is a new buzzword to describe the venture of financial technology into Islamic finance. The status quo is that few Islamic banks have been open to adapt new technologies, but many scholars in Shariah boards are challenged in this particular case of progress meeting tradition. The result is that not Islamic banks are the drivers for Shariah fintech, but startups, entrepreneurs and inventive enterprises. In Indonesia online microfinance services are part of this new wave of Shariah fintech. Some Shariah fintech startups are focusing on agri-finance platforms, Islamic crowdfunding, peer-to-peer lending and mobile payment applications, while others are developing blockchain solutions for Islamic finance services, automated halal investment, trading platforms and robo-advisers.

Why #Malaysian bonds are set to attract investors despite emerging-market jitters

With the improving quality of issuances, Malaysia is set to attract more investments into its growing bond market, say panellists at The Asset Malaysia Issuers and Investors Leaders Dialogue in Kuala Lumpur.

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