The world’s fourth largest cocoa grinder Guan Chong (GCB) is undertaking a sukuk exercise for its future expansion plans. It is launching a sukuk wakalah programme of up to RM800mil in nominal value. According to managing diector Brandon Tay Hoe Lian, proceeds from the first tranche of issuance of RM300mil will go towards funding the ongoing construction of a new cocoa grinding facility in Ivory Coast, which is set to commence operations in the second half of 2021. The programme will also support the company's expansion in Europe, following the acquisitions of industrial chocolate provider Schokinag in Germany and the land and building in United Kingdom.
Malaysia has over one million SMEs (small and medium enterprises) making up 98% of total businesses. The majority are micro SMEs, of which 21% are owned by women. One industry in which Malaysian SMEs could become a world pioneer is Islamic fintech. Islamic finance is now entrenched in Malaysia, accounting for 32% of financing to customers. Yet, according to the IMF, Islamic fintech is still in its infancy. In Malaysia, the growth of Islamic fintech can impact development in rural areas among Malays, offering this community a unique financial-inclusion opportunity.
Etiqa is contributing RM1mil for the purchase of ventilators through Mercy Malaysia’s Pandemic Fund to support strategic preparedness and response plan to the Covid-19 virus. This initiative will also help ensure all communities are well prepared, especially those with the weakest health systems. With the number of people infected with Covid-19 increasing in Malaysia, the number of ventilators available at designated hospitals will be insufficient to deal with the number of critical cases. Etiqa Insurance & Takaful Group CEO Kamaludin Ahmad feels obligated to help the country battle Covid-19 and hopes that this contribution will mean that no patient will have to be denied lifesaving care due to ventilator shortage.
Alliance Islamic Bank launched its first social crowdfunding platform to create greater socioeconomic impact for the financially disadvantaged. The new platform is named SocioBiz and targets individuals seeking to raise funds to start or expand a business or learn a new life skill to earn a living. Alliance Islamic Bank had signed a memorandum of collaboration with Islamic fintech venture builder, Ethis Ventures Malaysia, and beneficiary partners, Yayasan Kebajikan Negara, Yayasan Noor al-Syakur and Pertubuhan Kebajikan Islam Malaysia. SocioBiz targets to identify and promote at least two recipients each month on the platform. So far SocioBiz has rolled out six campaigns and raised over RM23,000 through its platform.
According to Securities Commission Malaysia chairman Datuk Syed Zaid Albar, Islamic finance has a prominent role in helping to address unmet needs of the world's Muslim population. He delivered a keynote speech at the SC-World Bank- IOSCO Asia Pacific Hub Conference 2019 and he underlined that Shariah-based financial contracts could be utilised for financial inclusion. World Bank Group representative to Malaysia and country manager, Dr Firas Raad, said Islamic finance could play a role in addressing the high levels of poverty in Organisation of Islamic Cooperation (OIC) countries. Meanwhile, touching on the Malaysian bond, ringgit and equity markets, he said the country's economy has strong fundamentals that could cope with any economic shock that might come its way.
The Tenaga Nasional Bhd informed the stock exchange that it has issued RM2bil Islamic medium-term notes (sukuk wakalah). This is the first issuance under the sukuk programme of up to RM5bil in nominal value set up last month. The programme has a tenure of 50 years starting from the date of this first issue.
Tenaga Nasional Bhd told the Bursa Malaysia that based on its consolidated statement of financial position as at May 31, 2017, its consolidated gearing would then increase to 0.70 times from 0.66 times. Additionally the sukuk wakalah issuance would not have any impact on the earnings, earnings per share and net assets per share of the company for the current financial year.
Earlier this year, Tenaga Nasional Bhd had said the proceeds raised from the programme would be used to finance capital expenditure, investment, general corporate purposes, working capital requirements and/or refinance any existing financing facilities and to defray any fees and expenses of the sukuk programme.
Public Islamic Bank Bhd is once more raising funds by tapping an Islamic medium term notes (sukuk murabahah) programme which was set up in 2014, issuing the second tranche of subordinated sukuk amounting to RM500mil after a gap of over three years. In a record with Bursa Malaysia, parent Public Bank Bhd said the takings would be used by Public Islamic Bank Bhd for its working capital, general banking and various other corporate purposes.
The first tranche was already issued in June 2014, also amounting to RM500mil with a tenure of 10 years. The coupon rate then was 4.75% p.a. The current tranche has a coupon rate of 4.65% per year, with maturity date of Aug 3, 2027.
Yinson Holdings' subsidiary Yinson Production (West Africa) has converted its existing US$780mil conventional loan to an Islamic Murabahah term financing facility. Group executive chairman Lim Han Weng said this was the largest Islamic facility for floating production storage and offloading (FPSO) financing to-date. Maybank Investment Bank acted as the coordinating bank for the conversion while Maybank Islamic acted as the syariah adviser. Upon completion of the conversion, Yinson is expected to meet the debt over total assets financial ratio benchmark required by the Securities Commission for a syariah-compliant security.
http://www.thestar.com.my/business/business-news/2017/01/27/yinson-converts-us$780mil-loan-into-islamic-financing-facility/
Bank Islam's managing director Datuk Seri Zukri Samat said he would not extend his contract when his tenure ends in June this year. When asked on his successor, Zukri said there was still plenty of time to search for a successor since it was only January. On Bank Islam Visa Infinite MPN credit card-i, he said it was introduced in response to Bank Negara’s call for a cashless society. He said the collaboration with MPN was the bank’s continuous cooperation with the academic institutions starting with the introduction of the UniDebit card in 2012. Meanwhile, MPN chairman Professor Tan Sri Zakri Abu Hamid welcomed the strategic cooperation to strengthen the corporate image of both parties.
The Federal Land Development Authority is set to raise funds for its 37% stake acquisition in PT Eagle High Plantations Tbk via a mix of loans and sukuk issuance.
Sources familiar with the matter said that 50% of the acquisition figure of RM 2.26 bil would be financed through a loan with a major European banking group. The remaining funds will be raised through a sukuk issuance.
“The sukuk issuance could be announced as early as late January. The debt will be serviced by the cashflow generated by Felda Investment Corp’s (FIC) assets,” said a source. It is probable that the sukuk would come with an explicit government guarantee, given that Felda is a government-backed agency. This is because most institutional funds – which are the likeliest parties to subscribe to the sukuk – can only purchase high-rated bonds as part of their investment mandate. A guarantee would ensure that the bonds are rated at or close to the top investment grade.
According to Moody’s, the growth prospects for the Islamic finance sector are still strong despite new sukuk issuance remaining subdued this year. Moody’s global head of Islamic finance Khalid Howladar said growth in the Islamic banking sector continues to broadly outpace that of conventional banks in most systems in which Islamic banks have been established. The sector also has potential for further growth, especially in countries in which the penetration of Islamic banking assets remains relatively low, at between 5%-10% of Islamic financing assets. New sukuk issuance volumes in 2016 are expected to remain flat, at around US$70bil. Growth in the Takaful sector is also slowing, but the rating agency expects it to remain at double digit levels into 2017 and for gross contributions to reach US$20bil by next year.
Technology financier Malaysia Debt Ventures Bhd (MDV) plans to raise RM1bil via sukuk in the fourth quarter of this year. The planned issuance is aimed to increase MDV's lending ability including to start-ups. CEO Datuk Md Zubir Ansori Yahaya said the new sukuk issuance would likely have a government-guarantee status. Md Zubir said the funds from the new sukuk, which will likely have a 10-15 year tenure, could be rolled out and replenished until end-2017. To-date, MDV has approved a total of RM9.8bil in financing support to 700 innovation, technology and information technology-based companies including Iris Corp, Puncak Semangat and MOL Global Inc.
After the listing of RHB Bank, attention is now on whether BIMB will do the same with Bank Islam Malaysia. Bank Islam is the oldest and largest standalone Islamic bank in Malaysia with an asset size of RM55.46 bn as at March 31. It also owns a 59.9% stake in insurer Syarikat Takaful Malaysia, while its other core business is BIMB Securities. BIMB, in turn is 53.6% controlled by pilgrim fund Lembaga Tabung Haji (LTH). It is believed that the bank still holds the dream to move into the big league and grow market share. However, it will not be able to achieve mega Islamic bank dream unless it mergers.
Sultan Nazrin Shah will lead a special session on Islamic Social Finance at the United Nation’s inaugural World Humanitarian Summit (WHS) in Istanbul. The summit is calling for a 'Grand Bargain' on finance and aid organisations will be told to stop competing for resources. The UN fell short of US$7.5bil (RM30.6bil) in funding needs last year, 30% of what it required. IDB’s research on zakat in 2015 shows an estimated US$600bil (RM2.4 trillion) available to meet humanitarian needs. If 1% of this is made available, it can meet the global funding deficit for 2015.
Islamic finance is well suited to bridge financing gaps in long-term infrastructure development projects, especially in less developed markets. Deputy finance minister Datuk Johari Abdul Ghani said Islamic financing had huge potential and could meet long-term funding needs since it suited its asset-based and risk-sharing nature. The global Islamic capital market has expanded in size and depth across areas, with a combined market value of over US$21.5tril spread across 70 jurisdictions.
Malaysian transportation provider Perak Transit aims to raise RM10mil in the form of a RM10mil term financing facility for three years via the investment account platform (IAP). Bank Muamalat is acting as the investment manager for the exercise, where the RM10mil is expected to generate a return of 6.5% per annum to investors. Investors can register at iaplatform.com to place their investments in Perak Transit, which starts at a minimum of RM10,000.
A report in one of the dailies suggesting that Islamic banking contributed to the collapse of Chase Bank is based on unfounded information. The facts as emphasised by Central Bank of Kenya Governor Patrick Njoroge are clear; that the underlying reason for the closure of the bank was under-reported insider lending by the directors and irresponsible use of social media, which accelerated the massive liquidity problems. Chase Bank is not the first bank to collapse and several others, which had no dealing with Islamic banking, have gone under. It is therefore insensitive to blame the collapse of Chase Bank on the Islamic banking system, which has proved to be an alternative and viable finance system.
President Uhuru Kenyatta is hosting two leaders of Africa’s Ieading economies, Muhammadu Buhari of Nigeria and Abdel Fattah el-Sisi of Egypt. These visits are to be viewed within the prism of Uhuru’s broader strategy of economic, trade, and cross-cultural bridgebuilding. They underline his growing clout not just in trade and commerce, but also in the cut-throat arena of global geopolitics and nuanced national interests. The booming African Islamic economy provides an opportune vehicle to ameliorate the deprived conditions and lack of economic opportunity. It is a perfect fit for our infrastructure financing needs. Uhuru signed three agreements and four MoUs to promote trade between Kenya and Nigeria in June 2014 – on Trade and Agricultural cooperation, immigration and drug trafficking. A Joint Business Council was formed.
There is no misappropriation of funds by the Malaysian Islamic Economic Development Foundation as the organisation is self-funded.
Deputy Minister in the Prime Minister's Department Datuk Dr Asyraf Wajdi Dusuki said the foundation "is an independent organisation and does not receive any grants from the Government" and tied to its trust deed. "Even the minister has no power in their matters", he said in his ministry's winding up speech for the 2016 Budget.
Asyraf said the foundation was not only formed to do charity work but to uplift the economic status of Muslims. He said the charity work was funded by its own systems such as ar-rahnu, which has generated an income of up to RM83mil to date. Asyraf said the foundation's total income to date was RM1.034bil.
Stressing that the funds are managed by the board of trustees, Asyraf said it has the liberty to decide as it an independent organisation. "If YaPEIM wants to invite a minister and pay for his cost, then that is its right. "The amount spent by YaPEIM for Minister in the Prime Minister's Department Datuk Seri Jamil Khir Baharom is merely 0.0063 % of their annual income," he added.
Last November, Kenyan president Uhuru Kenyatta attended the third Arab-Africa Summit in Kuwait. The visit and subsequent bilateral discussions were largely geared at establishing and strengthening joint financing mechanisms for capital intensive infrastructural projects through strong economic ties. During the visit, the Treasury realised Kenya was a member of the Islamic Development Bank which could help the country to tap more funds and become a highly industrializing, middle-income economy in the next 16 years. While over short term the country is focused on tapping into conventional financing streams from the dominantly Islamic Arab countries, it is angling herself to become the East and Central African hub for Islamic finance and banking over medium to long term period.