Malaysia

#Malaysia’s First #Green #Sukuk Under Securities Commission Malaysia’s Sustainable Responsible Investment Sukuk

Securities Commission Malaysia (SC) announced the issuance of Malaysia’s first green sukuk under its Sustainable & Responsible Investment (SRI) Sukuk framework. To complement SRI Sukuk framework, several incentives are in place to attract green issuers. They include tax deduction until year of assessment 2020 on issuance costs; tax incentives for green technology activities in energy, transportation, building, waste management and supporting services; financing incentives under the Green Technology Financing Scheme (GTFS) with total funds allocation of RM5 billion until 2022. To be eligible for tax deductions, issuers must ensure that proceeds are used to fund SRI projects in the natural resources, renewable energy and/or energy efficiency sectors. The framework underlying this first green sukuk is the result of collaboration between SC, Bank Negara Malaysia and the World Bank Group to introduce innovative financial instruments to tackle global infrastructure needs and green financing.

More Chinese companies to raise funds via #sukuk?

As a China state-owned enterprise (SOE) issued its first ringgit sukuk in the domestic bond market, many are wondering if other China companies would be doing the same. Beijing Enterprises Water Group (BEWG) issued RM400mil worth of medium-term notes on July 19 to finance its water treatment project in Kemaman, Terengganu. The sukuk issuance also marks the first ringgit-denominated sukuk by a China state-owned company for water infrastructure funding in Malaysia. According to analysts, China-based entities do not prefer to tap into the domestic sukuk market, as they are backed by strong financing sources from their home country. BEWG chief executive officer Datuk Vence Ong Kian Min noted that this was BEWG’s first-ever debt capital market instrument and the issuance has enabled the group to diversify its funding sources. The RM687mil project is expected to be completed in 2018.

Do more to boost Islamic #trade finance

As the World Trade Organisation (WTO) reaffirmed commitment to its Aid for Trade initiative, the outlook for global trade over the next two years is indeed mixed. WTO is forecasting that global trade will expand by 2.4% this year and between 2.1 to 4% next year, reflecting the continued uncertainty of the global economy. In Malaysia, Bank Negara Malaysia (BNM) Governor Muhammed Ibrahim wants Malaysia’s Islamic finance industry to boost trade finance to increase largely untapped business opportunities using technological capture. BNM is keen for Syariah-compliant trade financing to support 10% of total trade in the next three years. Malaysia’s Islamic finance industry has assets under management totalling RM742 billion. BNM wants the industry to leverage this pole position and to account for 40% of total financing in Malaysia by 2020.

#Fintech: First robo-adviser in Asia to offer shariah-compliant #investments

Robo-advisers are seen as a more transparent, convenient and low-cost alternative to human financial advisers. However, these platforms have limited options when it comes to shariah-compliant investments. To solve this problem, Malaysian Farringdon Group has recently launched its new robo-adviser called Algebra. According to CEO Stuart Yeomans, the company’s Virtual Mutual Fund Technology (VMFT) allows robo-advisory services for shariah-compliant investments to be offered at a lower price. Algebra can offer a wider range of investments and asset classes than other robo-advisory platforms. It adopts a smart beta strategy, which uses algorithms to derive its active equity portfolio before blending with fixed-income ETFs or sukuk funds. The shariah-compliant strategy used by the platform has been approved by Kuala Lumpur-based shariah advisory firm Amanie Advisors.

#Malaysia's Lead in Shariah #Funds

Malaysia remains a frontrunner in Southeast Asia's Shariah fund market, with $24 billion in Islamic mutual fund assets under management for the year ending May 2017. Global analytics firm Cerulli believes that Malaysia will preserve its pole position in Southeast Asia, while Indonesia will take a longer time to catch up, given the bias toward domestic investments. Malaysia's lead is largely due to its government's support of expertise in regional and Shariah investments. In January 2017, the Malaysian Securities Commission unveiled a five-year Islamic and wealth management blueprint to become an international Islamic finance center. Global firms have been encouraged to set up Islamic units in Malaysia through tax incentives and signing mutual recognition agreements with Dubai, Hong Kong, Ireland, and Luxembourg. The country is also embracing financial technology with new initiatives and regulatory support. Kuala Lumpur-based Farringdon Group recently launched a Robo-adviser service which follows Shariah investment guidelines.

Hong Leong Islamic Bank appoints Jasani Abdullah as CEO

Hong Leong Islamic Bank (HLISB) has appointed Jasani Abdullah as chief executive office. HLISB said Jasani has been acting CEO since December 2016. He has been in the financial industry for more than 30 years and his contribution towards the Islamic banking sector is very much valued. Jasani has been with HLISB since 2007 when he first joined as the head of shariah and product development. Jasani graduated with a Diploma in Public Administration from MARA Institute of Technology Malaysia, Bachelor in Business Administration from Ohio University, USA and has a Post Graduate Diploma in Islamic Banking and Finance from International Islamic University Malaysia.

#Kazakhstan, #Malaysia plant seeds for green Islamic finance

Astana International Financial Center (AIFC) has gained the support of technology financier Malaysia Debt Ventures (MDV) to develop both green and Islamic finance in Kazakhstan. Under a newly agreed MoU, AIFC and MDV will work closely with each other to share best practices, expertise and knowledge in these two areas. Apart from sharing knowledge, both parties will also explore financing green projects using Islamic financing tools. While not fully operational yet, AIFC is keeping busy by setting the groundwork. Green finance received a huge boost earlier in January when the European Bank for Reconstruction and Development agreed to launch the Green Financial System for Kazakhstan project, financed by Finland. With eyes on a comprehensive green financial system, engaging MDV could culminate in a variety of Islamic financial products for sustainable eco-friendly projects including green Sukuk.

Yeow joins Alkhair International Islamic Bank as CEO

Alkhair International Islamic Bank (AKIIB) has appointed Yeow Tiang Hui as its chief executive officer effective Aug 1.
AKIIB said in a statement that he succeeded Datuk Adissadikin Ali, who left the bank last year to head RHB Islamic Bank. Yeow has worked at several multinational banks, including managing the multinational portfolio at Deutsche Bank and being vice-president of Citibank/Citicorp’s venture capital outfit and its head of commercial banking. From 2007 to 2016 he served as head of corporate banking at Kuwait Finance House in Malaysia.

#Malaysia in bid to lift Islamic finance

The Malaysian Institute of Accountants (MIA) announced that Malaysia could become the first country to incorporate the International Financial Reporting Standards (IFRS) in Islamic finance. MIA president Datuk Mohammad Faiz Azmi said the accounting body was looking into the prospect. He added that MIA will come out with a book on how to apply the IFRS in Islamic finance, as many countries have not adopted it yet. The book will be launched later this month with the help of the regulators and banks. According to MIA, Malaysia adopted the IFRS in 2012, in keeping pace with global trends. The IFRS brings transparency, accountability and efficiency to financial markets. Faiz said MIA’s role was assisting Malaysian Accounting Standards Board (MASB) to prepare the market for IFRS. For that, MIA carries out various workshops and courses.

ICD and Saturna launch #sustainable Islamic #fund

The Islamic Corporation for the Development of the Private Sector (ICD) and Saturna have announced the launch of the ICD Global Sustainable Fund. The fund is designed for investors who seek to align their investment goals with social values. The launch of the fund enhances Malaysia’s position as the marketplace of innovation. ICD serves as one of the Fund’s seed investors and advisor, while Saturna is the Fund’s investment manager. The Fund will invest at least 80% of its net assets in equities of global issuers that demonstrate sustainable characteristics. The firm uses a proprietary ESG rating system to identify issuers with sustainable characteristics. Investors can buy the Fund with no sales charge, paying only low administrative fees and transparent distribution fees.

Shariah compliant #Robo #Advisor ‘Algebra’ to pilot in Asia before going global

#Malaysia-based private wealth management firm Farringdon Group is all set to launch its Shariah compliant Robo Adviser 'Algebra'. A robo-advisor is an online wealth management service that provides automated, algorithm-based portfolio management advice without the use of human financial planners. Farrigdon Group CEO Stuart Yeoman said that Algebra can take minimum investments worth $4000 and the launch is planned for next month. Before going global, Farringdon is piloting the product in Asia frst. Algebra is backed by smart beta trading algorithms to derive its active equity portfolio and blends it with Sukuk bond funds to derive a risk weighted portfolio. The robo-advisor will follow basic Islamic principles. It has received the approval of Shariah Scholar Datuk Dr Daud Bakar of Amanie Advisors for its shariah investment strategy.

Bursa #Malaysia-I Welcomes Inter-Pacific Securities Sdn Bhd As Islamic Participating

Bursa Malaysia added Inter-Pacific Securities Sdn Bhd (Inter-Pac Securities) to its Islamic Participating Organisations (Islamic POs) list. Bursa Malaysia CEO Datuk Seri Tajuddin Atan welcomed the new company and said that with this addition investors would have a wider choice of Islamic POs to represent them. Inter-Pac Securities Director Tan Mun Choy expressed his gratitude for Bursa Malaysia's approval to carry out Islamic stockbroking services.
With the inclusion of Inter-Pac Securities, there are now 12 Islamic POs carrying out Islamic stockbroking services of which 1 is on a full-fledged basis (BIMB Securities) and the other 11 are on a window basis.

Shariah Compliant #Robo to Launch

#Malaysia's Farringdon Group is about to launch its new Robo-adviser service which follows Shariah investment guidelines. Their new system branded Algebra relies on smart beta trading algorithms to derive its active equity portfolio. It blends the data with fixed interest Exchange Traded Funds (ETF’s) or Sukuk bond funds to derive a risk weighted portfolio suitable for any investor. Its shariah investment strategy is approved by Shariah Scholar Datuk Dr Daud Bakar of Amanie Advisors, the official launch date is set for July 10th 2017. By asking questions online, Algebra can complete a fact find and calculate its clients risk attitude and this cuts out the need for expensive consultants. Together with the Shariah version of this platform Farrington have also built and incorporated a Non-Shariah option.

Maybank Islamic named Asia-Pacific's Islamic Bank of the Year 2017

Maybank Islamic was named the Islamic Bank of the Year 2017 in Asia-Pacific by The Banker. The bank also received recognition in the country awards category for Malaysia. The Banker noted that Tier 1 capital and total Shariah-compliant assets enjoyed notable growth, climbing by 12% and 16%, respectively. Maybank Islamic’s return on equity for the year was 15.4%, while its cost-to-income ratio was a respectable 36% and non-performing financing were just 0.8%. The bank’s steady growth pace in Singapore and Indonesia also contributed to its recognition as the best in Asia-Pacific. Maybank Islamic's CEO Datuk Mohamed Rafique Merican attributed the bank’s achievements to its employees and sound risk management practices. He said the bank intends to further enhance its global brand visibility, while also deepening its existing regional presence.

Maybank Islamic appoints Zainal Abidin as chairman

Maybank Islamic has announced the appointment of lawyer Zainal Abidin as its chairman. Zainal has been a director of Maybank Islamic since 2010 and previously served as chairman of Maybank Trustees. Prior to that, Zainal was a director of Malayan Banking (Maybank) from July 2009 to April 2014. Zainal, 63, is a practising corporate and commercial lawyer. As the founder and senior partner, Zainal established the firm Zainal Abidin in 1987.

TH confirms backing Badlisyah for Bank Islam, denies bad blood with board

Lembaga Tabung Haji (TH) has confirmed its support of deputy CEO Datuk Badlisyah Abdul Ghani to lead Bank Islam Malaysia following the retirement of the bank’s group managing director, Datuk Seri Zukri Samat. TH has a 52.5% stake in BIMB Holdings which wholly owns Bank Islam. Bank Islam’s board had already put forward its choice, Khairul Kamarudin, to Bank Negara and the decision now lies with the central bank. TH CEO Datuk Seri Johan Abdullah confirmed recommending Badlisyah to be appointed to lead Bank Islam. He added that the choice of leadership and succession is subject to nomination of the board of directors and approval by Bank Negara Malaysia. He said TH was never at odds with the board of directors.

MIDF Amanah to introduce new shariah #fund for high net worth investors

#Malaysian Industrial Development Finance (MIDF) Amanah will introduce a new Shariah Equity Wholesale Fund for high net worth investors with a target to raise RM100 million. The fund will have two special key features, the first being that the fund will have zero entry fee, which means no sales fee will be charged to investors. Secondly, the fund will pay zakat on behalf of its investors. MIDF Amanah Asset Management and Amanah International Finance have also transitioned into fully Shariah-compliant entities.
The equity portfolios under MIDF Amanah have seen an overall exceptional performance in the first quarter this year with gains ranging from 10% to a high of 15%. MIDF managing director Datuk Mohd Najib Abdullah said the conversion of the asset management arm into a Shariah-compliant entity will cater to the ever growing demand for Islamic finance products and services.

Bank Islam #Brunei said to choose #Malaysia for US$500mil IPO

Bank Islam Brunei Darussalam has picked Malaysia as the destination for a planned initial public offering (IPO) that could raise as much as US$500mil. The IPO would be the first from a company based in Brunei, an oil-rich country without its own stock exchange. First-time share sales in Malaysia raised US$833mil so far this year, up from US$235mil during the same period last year. Shareholders of Bank Islam include the Brunei finance ministry, the Sultan Haji Hassanal Bolkiah Foundation, private equity firm Fajr Capital and about 6,000 Bruneian investors. The lender had 7.5 billion Brunei dollars (US$5.4bil) of total group assets at the end of 2015. Its Tier 1 capital adequacy ratio was 23.3%.

Source: 

http://www.thestar.com.my/business/business-news/2017/05/31/bank-islam-brunei-said-to-choose-malaysia-for-us$500mil-ipo/

Zukri: Islamic banking sector ripe for M&As

According to outgoing Bank Islam director Datuk Seri Zukri Samat, there are too many Islamic banks in Malaysia, which means that this segment of the local financial sector is ripe for mergers and acquisitions (M&A). Zukri is also advocating direct listings of such banks. There are 16 Islamic banks in Malaysia of which two are full-fledged banks, eight are subsidiaries of conventional banks and the remaining, foreign banks. Zukri hopes to see the creation of mega Islamic banks that can potentially become regional champions under the Asean banking integration framework. It is not yet known who will replace Zukri, but one name has already been submitted to Bank Negara for approval. Bank Islam’s parent company BIMB is at the same time contemplating a group-wide restructuring to fulfil regulatory compliance requirements.

Sime’s #sukuk plan gets okay, crucial step to carve 3 listed companies

#Malaysian holding company Sime Darby has received approval from its bondholders to restructure US$800mil (RM3.46bil) worth of sukuk. Holders of the sukuk approved the company’s plan to buy back the papers or replace the borrower to Sime Darby Plantation from Sime Darby. The broader reorganisation of the group involves the proposed listing of Sime Darby Plantation and Sime Darby Property through share distributions. Sime Darby will remain listed, owning the automotive, industrial equipment and logistics businesses. The holding company plans to create three standalone businesses: plantation, property and trading, and logistics. Plantation and property would be listed on Bursa Malaysia, while trading and logistics would remain under Sime Darby.

Syndicate content