IslamicFinance.de

While 1Malaysia Development Bhd (1MDB) is seeing a positive balance sheet with total assets exceeding total debts by RM3 billion, it cannot be denied that revaluation of its land assets, which were acquired relatively cheaply, is what saved it from slipping into a deficit. As at last January, 1MDB had RM53 billion in assets compared with RM50 billion in debts. While details of 1MDB's latest assets and debts are not available, past records do show that its cheap buys in the land division with the federal government especially have worked to help bolster its balance sheet by at least RM6.36 billion.

Malaysia plans to sell as much as US$1.5 billion of global Islamic bonds, less than a month after Indonesia's sukuk attracted bids of more than three times the offered amount. The marketing of the notes started on Monday and they will likely have maturities of 10 and 30 years. The proceeds will be used to refinance US$1.2 billion of Shariah-compliant debt coming due in July. Malaysia's sale coincides with a rebound in the ringgit, which has rallied more than 10 per cent this year. A pick up in Brent crude is also brightening the outlook for the oil exporter's finances, just as sentiment is improving after an indebted state investment company sold off assets.

Today, the country's business fraternity received news about the resignation of 1Malaysia Development Berhad's board of directors following the release of the Public Accounts Committee (PAC) report on the national strategic investment company. The key people behind 1MDB are Tan Sri Lodin Wok Kamaruddin, Chairman, and Arul Kanda President and Group Executive Director, among others. Tan Sri Lodin Wok Kamaruddin is the Chief Executive of Lembaga Tabung Angkatan Tentera since August 1982 and the Group Managing Director and Deputy Chairman of Boustead Holdings Berhad. Arul Kanda joins 1MDB from Abu Dhabi Commercial Bank where he was Executive Vice-President and Head of Investment Banking.

Malayan Banking Bhd (Maybank) and Singapore-based RB Capital inked a S$260mil (RM751mil) Islamic financing deal, one of the biggest Islamic deals in Singapore. The landmark deal involved a 442-room mid-tier Holiday Inn Express Singapore Clarke Quay as the underlying security. The bank is continuously looking at growing its Islamic banking business in the region, especially in Singapore and Indonesia, which each currently accounts for about 5.0% of Maybank Islamic’s revenue. Maybank Group’s Islamic banking business in 2015 surged 20.4% in total income compared to the year before.

The relations between Malaysia and Japan is characterized by a special nature, not seen in any other countries in this region. The relations are underpinned by a strong bond, forged for a long time by a policy called the Look East policy. This Look East policy has worked as a lynch-pin between the two nations. Under this Look East policy, young people in Malaysia have been studying in Japan and this policy has brought back benefits through the brains and hands of those young people to help the Malaysian economy to invigorate. As Malaysia in an Islamic nation, Malaysia can open a gateway for Japanese investors to the markets of the Islamic nations. Some of the Japanese financial institutions have already started to issue Sukuk bonds.

Maybank Islamic Bhd is confident its Islamic banking business in Singapore will contribute further to revenue in the future. Group head, Islamic banking, and chief executive officer Datuk Muzaffar Hisham said this was in view of the ongoing support from the Monetary Authority of Singapore (MAS) in promoting Islamic banking. Muzaffar said in less than three years, Islamic banking in Singapore had contributed about 5% to its revenue. It is reported that Singapore's central bank will continue to strengthen Islamic finance owing to its cross-border growth. The report said that since MAS established its sukuk facility in 2009, there had been eight sukuk issuances totalling S$600 million (RM1.7 billion).

Al Rajhi Bank Malaysia (ARBM) has received approval from Bank Negara Malaysia (BNM) for the appointment of Steve Chen Thien Yin as its new chief executive officer (CEO). As CEO, Chen is responsible for the overall operations of ARBM’s business to maximize company growth as well as to take on the responsibility in developing strategies to drive the Islamic banking and finance business of ARBM. Prior to joining ARBM, he was the chief operating officer (COO) for Corporate and Structured Finance at one of Malaysia’s largest local banks, Hong Leong Bank Berhad. Chen has held senior positions in various international foreign banks including J.P. Morgan, Royal Bank of Scotland, and Standard Chartered Bank.

Singapore's central bank has asked financial institutions to provide details of any transactions linked to Malaysian state investor 1Malaysia Development Berhad (1MDB) as part of its probe into possible money-laundering in the city state. The statement came late Thursday after it was reported earlier this week that the Monetary Authority of Singapore (MAS) has reportedly asked close to 40 banks with a presence in Singapore to provide information linked to 1MDB. Australia and New Zealand Banking Group (ANZ) and National Australia Bank (NAB) are believed to be among those queried. ANZ and NAB both declined to comment.

RAM Ratings expects investment accounts (IAs) to become an important source of new funding for Islamic banks this year as they emerge as potential game-changers in the way Islamic banks source their funds from the public. It noted that unrestricted IAs (UIAs), which are marketed to customers, are estimated to have increased more than RM14 billion in Q4’ 2015, surpassing the RM8.3 billion growth in the overall banking system’s deposits. The recent rapid growth of UIAs follows the requirement of the Islamic Financial Services Act 2013 that Islamic banks distinguish IAs from principal guaranteed deposits by end-June 2015. RAM’s assessment revealed that UIAs accounted for two-fifths of the RM47 billion of IAs in the Malaysian Islamic banking system as at end-2015.

Malaysian Prime Minister Najib Razak spent about $15 million on luxury goods from his personal bank accounts. On Christmas Eve 2014, Malaysian Prime Minister Najib Razak stepped onto Hawaii’s 18-hole Kaneohe Klipper course for a round of golf diplomacy with U.S. President Barack Obama. Off the fairways, another side of Mr. Najib’s time in office was on display. Two days earlier, the prime minister’s credit card was charged $130,625 to Chanel in Honolulu. The credit card was paid from one of several private bank accounts owned by Mr. Najib that global investigators believe received hundreds of millions of dollars diverted from the indebted state-run fund 1Malaysia Development Bhd.

UDA Holdings Bhd has signed financing agreements with financial institutions for a syndicated Islamic financing facility of up to RM500mil to finance its eight projects with an estimated gross development value (GDV) of RM1.62bil. The financiers are Affin Islamic Bank Bhd, AmBank Islamic Bhd, RHB Islamic Bank Bhd, Bank Pembangunan Malaysia Bhd and Kuwait Finance House (M) Bhd. UDA managing director Datuk Ahmad Abu Bakar said the finance facility would be use to partly fund the construction of the projects nationwide and the rest would be funded by sales. The eight projects comprise commercial and residential developments.

Malayan Banking Bhd (Maybank) has appointed Datuk Mohaiyani Shamsudin as chairman of Maybank Investment Bank and Datuk R Karunakaran as Chairman of Etiqa Insurance Bhd (EIB) and Etiqa Takaful Bhd (ETB). Maybank said the changes in chairmanship of its key subsidiaries followed the retirement of some directors. Mohaiyani is currently a director of Maybank. She is also the chairman of Maybank Asset Management Group Bhd and Maybank Asset Management Sdn Bhd. Karunakaran is a director of Maybank and currently sits on the boards of Maybank (Cambodia) Plc, and others. In addition, he is a director of Bursa Malaysia Bhd, IOI Corporation Bhd and Integrated Logistics Bhd.

So much money was pouring so rapidly into the Malaysian Prime Minister's personal bank accounts that it rang internal money-laundering alarms inside AmBank. Hundreds of millions of dollars were being wired into Najib Razak's accounts from the Saudi Arabian Government, a mysterious Saudi prince and two shadowy British Virgin Island companies, while the head of a Malaysian state-owned company topped up the Prime Minister's credit card accounts with millions of Malaysian ringgit in cash. Inside the bank, the Malaysian Prime Minister's account was held under the codename "Mr X". The startling new banking records have been obtained as part of a Four Corners program that aired last night, and which resulted in the arrest of two members of its team.

Islamic bond sales are off to a racing start this year as Malaysia plans to tap the market following Indonesia’s $2.5 billion issue, which was more than three times oversubscribed. Global sukuk offerings of $11.3 billion are already 30 per cent more than the first quarter of last year and are approaching the $12 billion for the same period of 2014. Malaysia reportedly selected JPMorgan Chase, CIMB Group, Malayan Banking and HSBC to arrange investor meetings for as early as the end of next week. In a sign of the demand that Malaysia’s government debt is attracting, a 4 billion ringgit ($998 million) sale of 10-year local-currency Islamic notes on Wednesday garnered a bid-to- cover ratio of 3.2 times.

Perak’s Sultan Nazrin Muizzuddin Shah told Islamic financial scholars and ulama to “think futuristically” in order to be current with contemporary developments. He said they can act as “institutional game-changers” in helping Islamic finance grow, but must leave their “ivory towers” and become more involved in the industry. Sultan Nazrin added that no industry was immune to “social evolution”, making it necessary for these scholars to make the effort to produce relevant financial products. He also said that it was important to inform the public more on the role of Shariah advisors in finance as their endorsement of an institution meant that it complied with the Islamic beliefs.

The Securities Commission Malaysia (SC) plans to launch the Islamic Fund and Wealth Management Blueprint by July to strengthen Malaysia’s competitive position in the global Islamic financial sector. SC chairman Datuk Seri Ranjit Ajit Singh said the SC was in the final stages of formulating the blueprint, which would be launched by the first half of the year and the action plan rolled out over five years. First announced by Prime Minister Datuk Seri Najib Razak at Invest Malaysia in April last year, the action plan aims to chart the medium- and long-term strategic direction for the industry as well as map out strategies to strengthen the country’s Islamic capital market.

Axiata Group Bhd’s 10-year US$500mil Sukuk received strong response with a final book of over US$900mil orders. The telco company said this was a bid-to-cover ratio of over 1.8 times, and a final yield of 4.357%. The bookbuilding exercise commenced with an initial price guidance of US Treasuries (“UST”) + 2.60% area. Demand for the Sukuk issuance led to a final price guidance of UST + 2.45% area ± 0.05% at Asian close/London mid with books in excess of US$1.4bil. The Sukuk would be issued by its Malaysian-incorporated special purpose vehicle, Axiata SPV2 Bhd. Proceeds of the Sukuk Issuance will be utilised to fund the proposed acquisition of Ncell Pvt. Ltd.

National mortgage corporation Cagamas Bhd is issuing its second Singapore dollar-denominated sukuk worth S$150mil. The sukuk, to be issued through subsidiary Cagamas Global Sukuk Bhd, will be fully and unconditionally guaranteed by Cagamas. The issuance, with a maturity of one year, comes under Cagamas’ US$2.5bil multicurrency sukuk issuance programme. The proceeds of the sukuk will be used to fund the purchase of Islamic home financing from the financial system. The issuance will bring the company’s aggregate issuance for this year to RM3.2bil.

The Securities Commission Malaysia (SC) will launch the Islamic fund and wealth management blueprint sometime this year, in a bid to firmly establish Malaysia as an international Islamic capital market centre. The blueprint, which is formulated by the SC, will chart the medium to long term strategic direction for the industry as well as map out strategies and recommendations to strengthen Malaysia's competitive edge, said the SC. The strategies are expected to reinforce the industry's sustainability and will include, among others, strengthening global capabilities of market intermediaries and seizing new market opportunities.

Falcon Private Bank Ltd. on Wednesday sought to distance itself from a controversy involving a Malaysian state fund caught up in allegations of political corruption, saying the transactions it carried out were based on purely commercial terms. Several Swiss banks, including Falcon, have come under scrutiny for transactions involving 1Malaysia Development Bhd. fund, or 1MDB. Among the transactions that are being investigated by authorities in Switzerland and Malaysia is the transfer of $681 million to the private account of Najib Razak, Malaysian Prime Minister.