IslamicFinance.de

This week, sukuk yields have reached a seven-year low, the declines are expected to continue. As the main reason the strong support of the sukuk demand by Asia and the Gulf is pointed out. The average yields approach the levels of January 2005.

The AAA(s) rating of Muhibbah Engineering Bhd's RM130 million Islamic Bonds has been reaffirmed by RAM Ratings. Thus, Muhibbah's irrevocable and unconditional undertaking to purchase and cancel all the Islamic Bonds at the exercise price upon the declaration of an event of default is honoured. The support of Malayan Banking Berhad's guarantee will have a positive impact on the credit profile of the Islamic Bonds beyond Muhibbah's inherent or stand-alone credit standing.

In Malaysia, there was a discussion whether to continue tax incentives for Islamic finance or to use tax-break pick-ups to lubricate the sector. Since some of the incentives were aimed to make Islamic finance competitive with conventional finance, they should at some point be phased out. However, incentives which ascertain the equity between Islamic and conventional finance, should be maintained.

On time for Ramadan, Takaful IKHLAS Sdn Bhd just started its corporate social responsibility (CSR) programme which aims to demonstrate the value of helping one another. As part of the programme, bank representatives visited a poor familiy and grantd them RM500 in cash and daily supplies worth RM300.

Until now, Malaysia has been focusing mainly on the takaful business, wich is not concidered enough any more. Malaysian bank should offer more innovative Islamic financial products as well. According to Chief Executive Officer of the Islamic Banking and Finance Institute Malaysia (IBFIM) - Datuk Dr Adnan Alias - it is essential for the development of Islamic economics, finance and entrepreneurship to be enhanced.

Even though Islamic finance has been thriving in Malaysia, a country with one of the most established and regulated Islamic finance frameworks, it is hardly present on the global Islamic finance market. Moreover, the majority of local banks tako part in neither the global syndication market nor the sukuk market. Therefore, confidence has to be built up in order for Malaysian banks to stop peceiving themselves as inferior to other syariah-compliant frameworks.

S&P Indices made an anouncement that a new Index will be launched due to increase in the demand for a shariah-compliant benchmark in Islamic countries. The new S&P/OIC COMCEC 50 Shariah Index will measure the performance of 50 leading Shariah-compliant companies from members of the Organisation of Islamic Cooperation (OIC). Eligible countries and territories for the Index are: Bahrain, Bangladesh, Côte d'Ivoire, Egypt, Indonesia, Jordan, Kazakhstan, Kuwait, Lebanon, Malaysia, Morocco, Nigeria, Oman, Pakistan, Qatar, Saudi Arabia, Tunisia, Turkey and the United Arab Emirates.

A government- guaranteed Islamic medium-term notes programme (IMTN) with a tenure of up to 20 years in weight of RM3 billion will be issued by the Small and Medium Enterprises Bank Bhd (SME Bank). According to the bank's managing director, the first issuing will be in accordance with the investment structure knon as the wakalah structure. AmInvestment Bank Bhd, Kuwait Finance House (M) Bhd and Maybank Investment Bank Bhd are appointed as the joint lead arrangers and joint lead managers for the sukuk.

Because of sweeping government reforms in their pension system, Malasians are most likely to allocate part of their retirement contributions to Islamic investments. Since the Employees Provident Fund (EPF) has limits in investing syariah-compliant areas, the new, voluntary Private Retirement Scheme (PRS) is meant to supplement it. Thus, contributors will be able to allocate money to a wide range of products offered by private-sector fund management firms including syariah-compliant investment. The result is a potential rise in the amount of money going into Islamic instruments.

Standard Chartered Saadiq is offering Takaful products to Prudential BSN: three new Takaful investment-linked plans at eight of its branches. In addition, these Takaful products will soon be available at the 32 conventional Standard Chartered branches in the country. Customers can count flexibility to secure protection and investment plans which correspond to their lifestyle and financial needs.

Aiming a better standard of living, Cambodia's Muslims are hoping of introducing the Islamic finance to the Buddhist country to lure investments from the Muslims-majority states in the Middle East and Asia.
Cambodian Muslims hope that by inserting Islamic finance, already booming in Malaysia and Middle Eastern countries, they could rule trade with those countries and attract investment from Islamic banks in the region.
This trade would improve the living standards for Combodian Muslims, who generally have a lower standard of living than their Khmer countrymen.

Global Donors Forum is the annual convening of World Congress of Muslim Philanthropists to promote effective giving and forge strategic partnerships for high-impact social investment.

The dates for the Global Donors Forum are now confirmed. The Forum will be held in Kuala Lumpur, Malaysia from April 26-28, 2012. The Global Donors Forum is pleased to announced that Forum will be declared open with a keynote address by Dato' Sri Najib Razak, the Prime Minister of Malaysia.

When it comes to public relations and marketing, the industry has a very big hole that is expanding day by day.
Although expanding their mandate to include marketing and public relations for a geographically- dispersed and fragmented industry at various stages of development would be unreasonable, the continued negative headlines will not go away even if they are ignored.
After determining a need for an industry body to promote and educate Islamic finance, the funding question should be asked. Fortunately, the experience of AAOFI, IFSB, IIFM, etc, suggests the stakeholders could include the Islamic Development Bank (IDB), Islamic financial institutions, forward-looking governments like Malaysia, the United Arab Emirates, and possibly the existing industry bodies (to include their technical message).

Islamic bonds are falling behind developing-nation debt for a second quarter as investors search for higher yields in non-investment grade securities.
According to the HSBC/Nasdaq Dubai US Dollar Sukuk Index, Shariah-compliant notes returned 1.5 % this year and non-Islamic bonds in emerging-market countries gained 4.1 %.
Sales of Islamic debt are intensified in Indonesia, Malaysia and the GCC, while lower-rated nations such as Egypt and the Philippines are still planning issuance.

The primary market recorded a year-on-year increase of 0.7 percent in December, despite the fact that it was a quiet month for issuances outside of Malaysia.
The largest issuance for the month was the third issuance of the year for Pakistan Domestic Sukuk Company Limited which launches on behalf of the government. The $781.1 million Sukuk Ijarah was structured with a three-year tenure.
A burst of Sukuk issues from the Persian Gulf shows borrowers are worried about limited global liquidity and future access to debt markets, and are turning to Islamic finance as a source of money that is rather untouched by the global turmoil.

Al Baraka Banking Group will launch Itqan Capital in Saudi Arabia, through its fully-owned subsidiary Al Baraka Islamic Bank.
Mr. Khaled Al Zayani, chairman of Al Baraka Islamic Bank, stated that the firm's future center of attraction will be on four areas: asset management, principal investment, investment banking, and custodial services - all supported by centralized advisory, research and business development capabilities.

Malaysia’s corporate Sukuk market has abandoned the blocks in 2012, shows the data collated by Zawya’s Sukuk monitor. The data added that $5.6bn of corporate Sukuk were issued in 2011, a shade behind the $6.4bn of corporate Sukuk issued in 2010 but surpassing the $2.5bn issued in 2009.
The vibrancy of the corporate Sukuk market in Malaysia has been split into an active and well-subscribed sovereign and quasi-sovereign market. Coupled with the efforts of the government of Malaysia and the governor of the Central Bank, Dr Zeti Akhtar Aziz, has seen Malaysia become the prime global Sukuk market.

MAYBANK Investment Bank Bhd (Maybank IB) wants to use the acquisition of Singapore’s banking franchise, Kim Eng Holdings, as a springboard to become a regional financial powerhouse.
The company now has operations in Malaysia, Singapore, Hong Kong, Thailand, Indonesia, Philippines, India, Vietnam, Saudi Arabia as well as in London and New York.
Maybank IB is focusing at this moment on establishing and expanding its line of business – investment banking and advisory, retail equities, institutional equities, derivatives and asset management – in its home markets, which are Malaysia, Singapore, Thailand and Indonesia.

Islamic finance banking options are progressively being seen as a viable alternative to traditional banking services in Africa and are growing to found not only the African Islamic community but all those searching for an interest-free banking alternative.
Key speakers from Nigeria, Malaysia and Saudi Arabia will join leading South African experts from ABSA, alBaraka Bank, KPMG and other financial institutions in the Islamic Finance Africa Conference that will take place on 21 - 24 February 2012 in South Africa.

National Bank of Abu Dhabi, HSBC, Standard Chartered, Citi, RBS and ENBD Capital were chosen by Emirates Islamic Bank (EIB) for a potential benchmark-sized dollar sukuk. EIB will began the investor meetings in Malaysia on January 5.