IslamicFinance.de

The expextations for the next three years are for global Islamic finance assets to grow between 10% and 15% a year. They will be supported by strong demand and supply factors as well as effective regulation and quality of services. Since the number of banks that offer Islamic finance and profit and loss sharing products is continually increasing, competition will contribute to the assets' growth.

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Today Bloomberg announced the launch of a new corporate sukuk index - Malaysian Ringgit (MYR). The index has been developed together with the Association of Islamic Banking Institutions Malaysia (AIBIM) and Bursa Malaysia. The purpose of the Bloomberg AIBIM Bursa Malaysia Corporate Sukuk Index is to serve as a benchmark for investors of ringgit-denominated Islamic bonds in Malaysia. It will track and measure the performance of the most liquid and credit-worthy Islamic corporate bonds in the country.

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According to leaders in the area of real estate investment, Malaysian real estate investment trusts show a positive developmen this year. The strong returns which Axis REIT Managers Bhd provided over the past year include Al-Hadharah Boustead REIT, Al-Aqar Healthcare REIT, Pavilion REIT, CapitaMalls Malaysia Trust, Axis REIT, Starhill REIT and Tower REIT. A further positive development is expected.

As part of its Sukuk programme, Axiata Group has priced its maiden two year Chinese yuan renminbi (CNY) denominated Sukuk. The whole multi-currency Sukuk programme is planned to be worth about $1.5bn. On Tueday Axiata priced the first part of the Sukuk. It is expexted that the issue will be listed Bursa Malaysia Securities and on the Singapore Exchange. Among the banks which worked on the issue are CIMB Investment Bank, HSBC and Merrill Lynch Singapore.

In an announcement by National Bank of Abu Dhabi (NBAD) its plans to seek an Islamic banking licence in Malaysia were revealed. This licence is to meet the demand for Shari'ah-compliant financing. After starting non-Islamic commercial banking operations, the company endeavours further expansion. According to CEO of National Bank of Abu Dhabi Malaysia Bhd, Leong See Meng, good opportunities exist for operations abroad.

The senior notes under HSBC Amanah Malaysia's proposed Multi-Currency Sukuk Programme of up to MYR 3 billion have received a long-term rating of AAA by RAM Ratings. At the same time, respective long- and short-term financial institution ratings of the bank have been reaffirmed at AAA and P1. The outlook for both long-term ratings in terms of stability looks positive.

The Association of Islamic Scholars (ASAS) in Kuala Lumpur plans to start a shariah board accreditation process. The move fill follow a points-based system, where the points are earned by Islamic scholars who participate in training cources offered by regulatory bodies. Shariah scholars will be required to sign a voluntary code of ethics and take a corresponding test. The scholars, however believe that this move is bound to fail. It is possible that Islamic finance advisors will not accept the notion of being accredited since the majority of them offer theit services without it.

Zurich Financial Group Ltd shows strong interest in involving in the takaful business in Malaysia. Strategically, a takaful arm contributes to the bench strength and access to the increasingly appealing market. Unfortunately, it is very unlikely for Bank Negara Malaysia to issue new takaful licence since they issued new licences to four new players in 2009. The hopes lie in 2014 when the adoption of the Risk Based Capital framework by the takaful industry is expected.

Syarikat Prasarana Negara Bhd is paying 20 per cent less to finance railway expansion than China, as sliding sukuk costs mean. In an interview yesterday the company’s finance director Mohd. Zahir Zahur Hussain said Prasarana RM1 billion each of 2022 and 2027 Syariah-compliant notes to yield 3.77 per cent and 4 per cent, respectively. The government’s debt clearing house website shows China’s Ministry of Railways issued 10-year non-Islamic bonds at a coupon rate of 4.68 per cent on Aug 21 and 15-year securities at 5 per cent.

Malaysia maintains its leading position in Islamic finance having a large volume of Islamic investors looking for syariah-compliant investments like sukuk compared to Singapore. The huge number of Muslim-owned companies in Malaysia is one of the most significant reasons for the high demand for syariah-compliant financing and sukuk issuance. 60 percent of global sukuk deals are concluded in Malaysia.

Celcom Axiata Bhd has reached a price of RM5bil in nominal value for its sukuk issuance. Via bookbuilding process, RM3bil of it received a final book of RM10bil. There is a strong demand for the RM3bil sukuk from asset management companies, financial institutions, insurance companies and corporate organisations. The remaining sum of RM2bil is privately allocated. According to Celcom, the RM5bil sukuk was the largest rated sukuk murabahah issuance based on a tawarruq arrangement in the Malaysian debt capital market to date.

According to Bank Negara Malaysia’s Shariah Advisory Council, there is a skill shortage in the Islamic finance Industry. In order to prevent it from hindering the growth of the Islamic Finance, Southeast Asian universities are adding Islamic finance courses. The new programmes will start at universitas Muhammadiyah in Malang, Indonesia and Kuala Lumpur-based International Centre for Education in Islamic Finance (INCEIF). The new courses shall bridge the gap between what was formerly taught and what is requred by employers.

Islamic financial body ASAS intends to globally launch a new scholar programme with aim to improve the financial literacy of scholars and this way to prevent the slowing of the industrial growth. In addition, it should be developed a global code of etics, in order to improve standards in the industry.

Malaysia's CIMB Islamic Bank defended its AA+/Stable rating on MYR 2 billion Tier-2 Junior Sukuk programme, issued by rating agency MARC . The programme rating is one grade lower than bank's financial institution rating of AAA. However, MARC confirmed the stable outlook for the rating of the programme, as CIMB Bank meets their expectations for the rating category.

Bank Islam Malaysia has allocated RM 200,000 in order to effectuate various welfare programmes fulfilling its commitment to corporate social responsibility (CSR) for Ramadan this year.

The GCC countries expect a record year for sukuk issuances in 2012. Already the first half of the year was marked by explosively growing sukuk issuances that reached to US $12.8 billion compared to US$1.9 billion issuead in the same period last year. The sukuk market shall continue growing at the current pace, due to a strong appetite of investors that are demanding Shariah-compliant products.

Syarikat Takaful's profit soars to RM22.58mil. This is mainly due to higher sales generated by family products and improved investment income. The company's outlook for the current year is encouraging despite increasing competition on the market.

Malaysia was invited by Sudan in order to provide support in the country's efforts to set up Islamic banks on their territory. It shall help Sudan to facilitate trade and to ease investment financing between both countries. This move is considered as a sign of recognition of Malaysia as Islamic financial centre.

Today Bank Islam Malaysia Bhd presented to the Sabah Tithe Centre business tithe of RM120,979 for distribution to deserving recipients. Last year the bank also registered a pre-tax and pre-tithe profit amounting to RM470.1 million.

Reforms in the Malaysian pension system aiming to liberalise Malaysia’s pensions market have been announced. One of the newly introduced items is the voluntary Private Retirement Scheme (PRS). It will allow Malaysians to purchase a wide variety of products from private fund management firms, thus making it easier for them to focus on Islamic investment. The expected result of this move is a notable stimulation of the Islamic finance market. However, in order to bolster investor confidence in the sector, greater regulatory oversight will be necessary.