The Star Online

Kuwait Finance House revamp to include new CEO, investment banking unit

Kuwait Finance House (KFH) is mulling over a restructuring exercise that will entail a change of chief executive and the creation of a separate investment banking division. KFH's existing chief executive officer (CEO) Datuk Jamelah Jamaluddin had reportedly been chosen to head this new investment banking subsidiary. Datuk Seri Abdul Hamidy Abdul Hafiz, the chairman of Danajamin Nasional and Credit Guarantee Corp, is a likely replacement as KFH's CEO. KFH is seeking approval from the authorities for these changes, which it intends to bring about soon.

AFG selling 30% stake of Takaful associate to AIA for RM45m

Alliance Financial Group (AFG) is selling its 30% stake in AFG Takaful to American International Assurance. The stake comprises 30 million shares of RM1 each, and is being sold for RM45mil. AIA AFG Takaful's core business is to carry out family takaful business. AFG said the disposal was not expected to have any material effect on AFG's net assets per share, earnings per share and gearing of AFG for FY ending March 31, 2013.

ECB, IFSB conducting study on Islamic finance

The European Central Bank and the Malaysia-based Islamic Financial Services Board (IFSB) are conducting a joint study on policies affecting Islamic finance in Europe. European scholars and regulators are going to examine a broad set of policy and regulatory issues in relation to Islamic finance in Europe. An expected release date was not given. The study will be complemented on April 9 by the IFSB's annual forum, which will be hosted by the Bank of Italy in Rome.

CIMB Research: Affin’s plan to acquire Bank Muamalat progressing

According to CIMB Equities Research, mergers and acquisitions (M&As) are still high on Affin Holdings's agenda to support its future growth. Hence, Affin is still planning to acquire Bank Muamalat. The banking group has submitted the offer and is waiting for the response from the owner of Bank Muamalat. It could also be interested in bidding for HwangDBS Investment Bank. CIMB Research said Affin is now reportedly less keen to purchase Bank Ina Perdana in Indonesia due to the 40% shareholding cap imposed by the Indonesian central bank.

Exim Bank plans US$1b suk

State-owned Export-Import Bank of Malaysia (Exim Bank) plans to sell Islamic bonds in the global market. They invited proposals from banks to arrange US$1bil (RM3.1bil) of dollar-denominated debt for a possible second-quarter offering. The lender aimed to increase the proportion of syariah loans to 30% of the total in two years from 20% now, chief executive officer Adissadikin Ali said. Exim Bank will become only the fourth Asian corporate to ever tap dollar sukuk investors.

Australia's first issuance of sukuk

SGI-Mitabu, a venture between The Solar Guys International and Mitabu Australia will finance its entire Indonesian solar power project using sharia-compliant financing. The first 50 megawatt (MW) of the 250 MW solar power project will be financed through the issuance of a seven-year A$100 million ($104 million) sukuk in Labuan, Malaysia's offshore financial centre. This will be followed by two more tranches which will be structured as either sukuk or Islamic syndicated loans.

TH enlists MIDF to help in sukuk issuance

TH Heavy Engineering plans to issue non-rated sukuk under the Sukuk Murabahah programme with MIDF Amanah Investment as the principal adviser. The Sukuk Murabahah is unrated, non-transferable and non-tradable. The Securities Commission (SC) reportedly authorised the proposed programme. The tenure of the Sukuk Murabahah programme is up to six years from the date of the first issuance, which will be made within one year from the date of the SC’s authorisation.

Bahrain: Make M'sian-based Islamic Financial Services Board rules and regulations mandatory

Khalid Hamad, executive director of the Bahrain Central Bank, said that the implementation of the Malaysian-based Islamic Financial Services Board (IFSB) should be mandatory. These rules and regulations would contribute to better growth of the industry. He further pointed out that the role of the IFSB is very similar to the one of the Basel committee in terms of issued guidelines and standards.

Sukuk rating now mandatory only in M'sia, but expected to grow with sukuk growth

According to Fitch Ratings, the growth of sukuk issuance in 2013 will be ensured by strong demand, mainly in originator-backed (asset-based) sukuk structures. Expectations for 2012 global sukuk issuances are for them to reach USD121b. This is an increase of 62% compared to the USD84.4bn the year before. At the moment Malaysia is the only country where sukuk rating is mandatory. The rating is considered to play a significant part in improving the confidence in this growing instrument.

Aye for Sime’s US$1.5b sukuk

Sime Darby Bhd has been approved by the Securities Commission for its proposed US$1.5bil multi-currency sukuk issuance programme. The programme is seen as a significant landmark since it is first internationally rated multi-currency syariah-compliant sukuk programme by an Asian corporate. The ratings of Sime are A, A and A3 by Standard & Poor's Rating Services, Fitch Ratings Ltd and Moody's Investor Service, Inc.

Malaysia launches first exchange traded bonds, Sukuk (Update)

The first exchange traded bonds and Sukuk (ETBS) has been launched on Tuesday. The sukuk was launched by Prime Minister Datuk Seri Najib Tun Razak, who explained that the retail offering would make it possible for citizens to have a stake in the country's success. Danainfra Nasional Bhd is allocating as much as RM300mil under this issuance. The initial tranche will be used to fund the first phase of the MRT Kajang to Sungai Buloh line.

First Aussie sukuk taps Labuan for RM489mil

The SGI-Mitabu launched the first ever Aussie sukuk in the Malaisian offshore tax haven Labuan, thus avoiding Australian rules that penalize Sukuk. The offshore paradise Labuan which has established a global financial hub in 1990 is located on the coast of eastern Sabah state on Borneo Island (Malaysia).

Call for harmonised Islamic financial reporting

A recent report by the Association of Chartered Certified Accountants (ACCA) and KPMG states makes a call for co-operation between standard setters and Islamic banks. Thus, harmonization of financial reporting shall be enabled. ACCA supports the opinion that due to the rapid global growth in Islamic finance reports must be harmonized and consistent. Guidance and standards should be developed and the investor community should be educated on the most significant matters.

Zeti: Legal framework for Islamic banking, takaful being enacted

Tan Sri Dr Zeti Akhtar Aziz - governor of Bank Negara Malaysia - recently announced that the legislative process for the new legal framework for Islamic banking and takaful to be enacted is progressing. Not only will the new framework streamline the legal requirements across sectors but it is also expected to make sure that the law was reflective of the nature and features of Shariah contracts. Moreover, this way the degree of regulation would commensurate with level of risks that Islamic financial institutions, markets and products pose to the overall financial sytem.

UAE’s bank issues US$163mil sukuk

A RM500mil (US$163mil) Islamic bond has been issued by the National Bank of Abu Dhabi. The issued sukuk has an interest rate of 4.75% and will mature in 15 years. The joint lead managers of the transaction besides the Malaysian national bank were HSBC, Maybank Investment Bank and Standard Chartered.

MARC downgrades Tanjung Langsat Port’s sukuk, notes programme

The new rating of Tanjung Langsat Port Sdn Bhd's sukuk musyarakah bonds and RM135mil musyarakah commercial papers/musyarakah medium-term notes programme (MCP/MMTN) by Malaysian Rating Corp Bhd (MARC) is lower than the previous one. It was downgraded from A-IS and MARC-2ID/A-ID to BBB+IS and MARC-3ID/BBB+ID respectively. The downward change in rating is a reflection of the company's continuous losses and weak cashflow due to a delay in the commencement of its port operation.

20-year sukuk with 4.36% yield sold

A 50 basis-point premium for a 20-year sukuk over non-Islamic sovereign debt was paid by the Finance Ministry. This makes it the biggest spread for government-guaranteed syariah-compliant notes in 2012. Turus Pesawat Sdn was appointed to sell the securities which are intended to fund aircraft purchases for Malaysian Airlined. The company managed to sell RM3.4bil of debt in total. The yield of the RM1.65bil portion of 2032 notes was 4.36%.

Islam and the go green concept

Islam stresses on the necessity and importance of environmental protection and advocates that people should live in harmony with nature. Moreover, sustainable development, enrichment of life on earth, and optimal use of available resources are pointed out as key issues. Apart from the relationship between Allah and man, and between peoples, Islam provides guidelines on the way to deal with environment and natural resources. Islam describes the relationship of man towards the earth as that of a custodian.

Ministry said planning RM5.3bil sukuk to buy aircraft

Sukuk sells as high as RM5.3bil are planned by the Finance Ministry aiminig to help the nation’s loss-making carrier buy new aircraft. The sukuk will be under a 20-year programme. Turus Pesawat Sdn Bhd will be responsible for selling the notes, starting marketing this week. The government will purchase six Airbus A380s and two A330s worth RM5.3bil for Malaysian Airlines (MAS). By expanding its fleet, MAS hopes to win back business from AirAsia Bhd.

THP issues RM200mil in sukuk

TH Plantations Bhd (THP) has made a sukuk murabahah programme worth up to RM1bil in nominal value. The establishment is made together with the Pilgrimage Fund Board. THP made known to Bursa Malaysia that RM200mil of sukuk have been issued as part of the programme. The tenure of the sukuk is up to 15 years with a maturity date Oct 29, 2027.

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