Malaysia

CIMB Islamic contributes RM1 million for conservation efforts of Setiu Wetlands

CIMB Islamic Bank has committed RM1 million per year, renewable annually for up to 3 years for the conservation efforts of Setiu Wetlands, Terengganu. The three-year project with a total potential commitment of RM3 million, is in collaboration with World Wide Fund for Nature Malaysia (WWF-Malaysia). The project contributes towards safeguarding Setiu Wetlands’ healthy and functioning ecosystem by establishing a critical knowledge base to guide sustainable development. This is CIMB’s third collaboration with WWF-Malaysia on strategic conservation projects, subsequent to the project in Ulu Muda, Kedah, and in Ba’ Kelalan and Long Semadoh in Sarawak.

Evolving Islamic fintech

In this interview Stalla Cox CBE, the Managing Director of DDCAP speaks about her company and the evolving Islamic fintech scene. DDCAP Group was established over twenty years ago and has always selected its global expansion strategically. DDCAP opened in the Dubai International Financial Centre (DIFC) in 2008. Following the turn of 2000, there was significant repatriation of Shari'ah compliant capital to the Middle East. At a similar point in time, DDCAP was also invited by Bank Negara Malaysia to join a steering group that was formed in response to the Malaysian financial authorities granting permissions to Islamic banks from the GCC to do business locally. Consequently, a regional office was opened in Kuala Lumpur, Malaysia. The global financial services industry is moving at an incredible pace. With ETHOS AFP, DDCAP managed to create an enabling platform with global reach and provides a fully integrated treasury trading workflow for Shari’ah-compliant transactions.

Alliance Islamic Bank Launches Halal in One Programme

Alliance Islamic Bank launched its Halal in One Programme, a halal enterprise ecosystem that aims to help small-and-medium enterprises (SMEs). The programme offers business owners solutions like business advisory, business matching services, and shariah-compliant financing. Alliance Islamic signed a memorandum of understanding with its strategic partner HQC Commerce Sdn Bhd (HCSB) in conjunction with the launch of Halal in One Programme. Alliance Islamic CEO Rizal IL-Ehzan Fadil Azim said SMEs in Malaysia have the advantage to tap into the global halal segment, where 90% of SMEs are not certified. He said Alliance Islamic's Halal in One Programme offers business advisory to help SMEs obtain halal certification from the Department of Islamic Development Malaysia.

Islamic banks ready to support SMEs

According to the Association of Islamic Banking and Financial Institutions Malaysia (AIBIM), local SMEs are not fully utilising various solutions provided by Islamic banks despite credit availability. AIBIM has 26 members comprising of 11 domestic banks, 5 development financial institutions and 10 locally incorporated foreign banks. A recent survey of its members shows that about 10,000 SMEs received more than RM10 billion in funding. AIBIM stated several Islamic financial institutions provide supply chain financing, also known as supplier finance. Supply chain financing is a set of solutions that improves cashflow by allowing businesses to lengthen their payment terms to their suppliers while providing the option for their large and SME suppliers to get paid early.

Is return to gold standard imminent?

The Kuala Lumpur Summit 2019 called for a common cryptocurrency to be implemented among Muslim nations to avoid dependence on the US dollar. Prime Minister Tun Dr Mahathir Mohamad also called for the use of gold among Muslim nations particularly for trade settlement. The return to some form of gold standard globally is going to be among the greatest events that will take place in this century. The Movement for Monetary Justice Malaysia (MMJ) believes the best form of money for the modern world is gold-based cryptocurrency with a netting arrangement. Gold would bring about a fixed exchange-rate regime and eliminate speculation, manipulation and arbitrage in the foreign-exchange market and thereby would bring back stability and sustainability.

Malaysia Plans Digital Banking License Launch

Malaysia becomes the latest to capitalize on the rising trend of digital banking with plans to issue up to five licenses.

Islamic banks ready to support SMEs

The local Malayesean small and medium enterprises (SMEs) are not fully utilising various solutions provided by Islamic banks despite credit availability. The Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) took a survey in Kuala Lumpur and Selangor and about 10,000 SMEs received RM10 billion in funding.

Experts say the odds are against gold dinar

Prime Minister Dr Mahathir Mohamad brought an idea of a gold dinar as an international reserve currency for Muslim countries in preference to the US dollar as the dollar was sometimes unstable. Nazari Ismail, a professor of economics at Universiti Malaya thinks, that the idea is not reliable, as countries as Saudi Arabia, Qatar, Pakistan and Indonesia would be not interested in the prime ministers proposal.

Islamic finance body IILM names new CEO

The International Islamic Liquidity Management Corporation (IILM) has announced on monday that Dr. Umar Aimhanosi Oseni is their new CEO. (IILM) is an international consortium that issues short-term Shariah-compliant financial instruments to facilitate cross-border liquidity management for institutions that offer Islamic financial services.

BIMB group restructuring to finally unfold

The BIMB Holdings Bhd group is set to finally unfold. BIMB announced a series of proposals that will ultimately see it transfer its listing status to its wholly-owned subsidiary Bank Islam Malaysia Bhd. In the first step, BIMB will undertake a private placement of new shares to raise RM800 million to fully settle outstanding sukuk held by Lembaga Tabung Haji (TH). BIMB had, December 2018, done an early partial redemption of RM609.9 million, helping reduce the outstanding amount.

Leaders call for use of alternative currency among Muslim countries against US Dollar

At the ongoing Kuala Lumpur Summit 2019, leaders of the Muslim world have pressed for alternative currency for use in trade and seek independence from US Dollar. Turkish President Recep Tayyip Erdogan said Muslim countries should try to create new transaction systems. He added that Islamic finance needs to be part of the agenda just like in Malaysia. Meanwhile, Iran's President Hassan Rouhani was of the view that Muslim nations should come up with a new own cryptocurrency. Malaysia's Prime Minister Tun Dr Mahathir Mohamad also believes that a united cryptocurrency is needed for Muslim states, as a cryptocurrency can cut through bureaucratic and market fluctuations. He added that utilising cryptocurrency or national currency would help attain independence from over-reliance on the US dollar.

#Qatar reaches out to Shariah market in #Malaysia, #Turkey

Qatar has taken the lead in reaching out to Malaysia and Turkey through which the country aims to be the dominant player in the global Shariah financial landscape. Under the proposed plan, Turkey would cover Islamic finance needs in Europe, Qatar would serve the greater Middle East and North Africa and Malaysia will continue to serve the Asian markets. The London Stock Exchange is currently a global venue for the issuance of sukuk, while Hong Kong and Luxembourg have also made inroads but Qatar believes the market should be led by Muslim countries. Qatar Financial Center (QFC) Authority CEO Yousuf Mohamed al-Jaida has a vision to cover the entire globe’s Islamic financial transactions between three financial centres, Doha, Istanbul and Malaysia, therefore he sees a need to share platforms and technology.

Islamic finance sector to benefit from rapid family takaful growth

According to Malaysian Reinsurance CEO Zainudin Ishak, the Islamic finance industry as a whole is poised to benefit from the rapid growth of family takaful into a dominant position. The company aims to attain a sustainable long-term growth through the capability to write both family and general retakaful businesses. Malaysian Re has just signed a memorandum of understanding (MoU) with Pacific Life Re in Kuala Lumpur. The collaboration is expected to expand Malaysian Re’s access to international research and data through the usage of the underwriting technology powered by Pacific Life Re’s fully owned subsidiary, UnderwriteMe. Meanwhile, Pacific Life Re will provide support for MRRD’s family takaful business through its technical pricing, underwriting, product development, experienced analysis and global insights.

#Turkey, #Malaysia, #Qatar can pioneer in Islamic finance

Ready to be taken to the next level, the burgeoning sector of Islamic finance is ready to take root in new regions through Turkey, Malaysia and Qatar. According to Yousuf Al-Jaida, CEO of the Qatar Financial Centre, Malaysia could act as a gateway for Islamic finance into Asia, with Turkey into Europe and Qatar the Middle East and Africa. He stressed that Malaysia was ready with its legal framework to facilitate the sector, while Qatar and Turkey need to step up and do more for the sector. Al-Jaida said these three countries could form a large platform to share experience, technology and knowledge. He is optimistic and sees a bright future, as Islamic finance is now growing at an even quicker pace than conventional finance.

SC launches new roadmap to drive sustainable investments

The domestic capital market is expected to play a critical role in helping Malaysia meet the estimated RM45 billion required to finance its long-term sustainable development goals. Securities Commission Malaysia (SC) chairman Datuk Syed Zaid Syed Jaffar Albar said climate change poses physical and financial risks to companies. The change to more sustainable practices requires investments in new technologies and funding which carries risks with indeterminate outcomes. Malaysia alone is projected to require RM45 billion in the next five years. Therefore, the SC released the sustainable and responsible investment (SRI) roadmap to establish the country as a regional SRI centre. The roadmap identified 20 strategic recommendations based on the SC’s five i-Strategy: the widening of the range of SRI instruments, increasing the SRI investor base, building a strong SRI issuer base, instilling a strong internal government culture and designing information architecture.

Waqf, zakat mechanism can make houses more affordable: Amiruddin

The Malaysian government is currently looking into various avenues in Islamic finance which can be used to make houses more affordable. Deputy Finance Minister Datuk Amiruddin Hamzah said that one state in the northern region is currently conducting a waqf housing scheme for the people. He said this at the sidelines of the inaugural International Centre for Education in Islamic Finance (INCEIF). INCEIF president Datuk Azmi Omar said that there are a lot of waqf land that can be used to develop affordable housing. The cost to develop the houses can be lower, however, the houses will be under a long-term lease. On another matter, Amiruddin said that the digital banking framework is set to push the country forward in the digital banking landscape.

Sharia committee wants to quadruple Islamic bank assets by 2024, will partner with #Malaysia

Indonesia's sharia financial committee hopes to quadruple the nation's sharia bank assets over the next five years. The comittee's executive director Ventje Rahardjo said that the goal was to reach Rp. 2 quadrillion (US$142.2 billion) in sharia bank assets by 2024. The committee plans to widen its coverage of Islamic finance to the Islamic economy in general. Therefore, the name of the committee will be changed to the National Committee for Sharia Economy (KNES) to better reflect its responsibility to oversee the development of the halal value chain. Ventje added that Indonesia and Malaysia would work together to create a regional halal standard. The committee also plans to digitize sharia financial services, including a digital zakat platform and a sharia-compliant e-wallet.

IILM reissues $600mln #sukuk; GCC banks act as primary dealers

Malaysia-based International Islamic Liquidity Management Corporation (IILM) has reissued A-1 short term sukuk worth $600 million in two series. The reissuance came in the form of $300 million with 1-month tenor at a profit rate of 1.85% and $300 million with 3-month tenor at a profit rate of 1.91%. Primary dealers include Abu Dhabi Islamic Bank, First Abu Dhabi Bank, Barwa Bank, Boubyan Bank, Kuwait Finance House and Qatar Islamic Bank. The non-GCC banks that participated in the reissuance include Maybank Islamic, Standard Chartered Bank, Al Baraka Turk and CIMB Bank. The demand for the 1-month and 3-month Sukuk series reached a bid-to-cover ratio of 208%, and 255%, respectively.

Wan Azizah: Make Islamic finance part of halal ecosystem

According to Malaysian Deputy Prime Minister Datuk Seri Dr Wan Azizah Wan Ismail, action needs to be taken to make Islamic finance part of the halal ecosystem. She said it was reported that there seemed to be a disconnection between the halal industry and Islamic finance. Based on Bank Negara Malaysia (BNM)’s Financial Stability and Payment Systems Report 2017, Dr Wan Azizah said Islamic business financing continued to exhibit a strong growth of 12.5%. However, she pointed out that there was insufficient access to Islamic financing for the growth of small and medium enterprises (SMEs) in the halal sector. She said Malaysia could serve as a focal point for halal product trade intelligence by being the premier destination for halal trade exhibitions and commerce.

#Malaysia remains key source of Islamic debt papers

According to Fitch Ratings, Malaysia remains the main sukuk issuer this year besides countries from the Gulf Cooperation Council (GCC) region. The increase in Malaysia’s sukuk market is largely driven by Bank Negara Malaysia (BNM) and contributed by local currency corporate issuance. Notable corporate deals included energy service firm Serba Dinamik’s US$300 million (RM1.25 bilion) sukuk, the first dollar high-yield sukuk offering in the Asia-Pacific region. The Malaysian market shows how as the Shariah-compliant investor base grows, the cost of sukuk issuance becomes more competitive relative to conventional bonds. Fitch believes that global volumes normalised rather than declined last year after hitting record levels in 2017. Moving forward, Fitch believes macro-economic and geopolitical conditions will affect sukuk issuance. GCC debt markets are relatively developing but individual sovereign funding decisions can profoundly affect total supply.

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