Malaysia Chronicle

Global calls for Najib's head to roll: #1MDB triggers massive shake-up in financial world

#Malaysia could find fame for triggering a new, more effective level of regulatory cooperation between the financial centres of the world. This can be the positive result from landing at the centre of the world’s biggest money-laundering investigation. Investigators are working closely to trace the US$7 bn gone missing from the 1MDB fund into a network of off-shore companies before emerging once again in the bank accounts of politically connected Malaysians. Meanwhile, the Government of Malaysia is continuing to act as if nothing has happened. Prime Minister Najib has been impeding investigations at home, but worldwide he is a smaller player. His political connections cannot save him from the independent justice departments of the various financial centres involved.

WHERE WILL NAJIB HIDE HIS FACE: Switzerland names the companies 'linked to 1MDB scandal'

The Swiss attorney general’s announcement that $4 billion may have been misappropriated from Malaysian state-owned companies opened a new front in the troubles facing 1Malaysia Development Bhd. Switzerland’s top prosecutor on Friday named a number of firms in Malaysia, Saudi Arabia and Abu Dhabi in relation to the matter, but gave no details of their roles, if any. The investigation is one of a series of global probes into 1MDB. A Malaysian government investigation last year found that almost $700 million entered Mr. Najib’s alleged bank accounts via agencies, companies and banks linked to 1MDB ahead of a close election in 2013.

Big potential in Islamic ETFs

Industry players are upbeat about Islamic Exchange-Traded Funds (ETFs) but say a lot needs to be done to raise awareness and excitement about the investment fund. Generally, however, Malaysia has not been enjoying much success when it comes to ETFs since the first product was listed on the local bourse in 2005. Global ETF experts were in unison in pinpointing limited investor awareness as the culprit for the fund’s lack of success. The Malaysian ETF market stands at RM1.03 billion of assets under management (AUM) as at August 2014, versus the global figure of more than US$3 trillion (RM9.6 trillion) by year-end. On the global stage, ETFs have been growing at a phenomenal rate, estimated at some 20 per cent of compounded annual growth rate since its debut in 1989.

Maybank Islamic denies talks of merger with Bank Islam

Maybank Islamic Bhd has dimissed speculations that it is in talks with Bank Islam Malaysia Bhd over a potential merger and acqusition (M&A). Its chief executive officer Muzaffar Hisham said the proposed merger of three local financial institutions to create a mega Islamic bank has not prompted Maybank Islamic to rush into M&A for expansion. Muzaffar said Maybank Islamic will continue to focus on its key objective, namely humanising financial services, which has been the driver of the bank’s outstanding track record over the last three to four years. Meanwhile, Muzaffar said Maybank Islamic is optimistic of maintaining its growth momentum in the second half of the year after recording an encouraging performance in the first half.

Japan's top banks tap M'sia shariah licenses

Japan’s three-biggest lenders have won licenses to offer Islamic banking services in Malaysia. Sumitomo Mitsui Banking Corp Malaysia Bhd obtained approval to operate in the Southeast Asian nation on February 10. The lender expects to provide foreign-currency financing to local companies in the form of Murabaha and commodity. Bank of Tokyo-Mitsubishi UFJ Malaysia Bhd offers Islamic loans and guarantees among its services after obtaining approval in 2008, while Mizuho Financial Group Inc provides Shariah trade financing since getting a license in 2012. Japanese entities have also chosen Malaysia as a place to raise funds via the Islamic debt market.

MBSB: RHB Islamic a takeover option

In the possible merger between Malaysia Building Society Bhd (MBSB) and RHB Capital Bhd (RHBCap), MBSB president and chief executive officer Datuk Ahmad Zaini Othman said MBSB is capable of taking over RHB Islamic. MBSB itself has more than RM30 billion in assets a shareholders' fund of more than RM2 billion and a market capitalisation of RM5 billion on Bursa Malaysia. One option for MBSB is therefore to take over RHB Islamic's RM4 billion assets. Employees Provident Fund (EPF) chief executive officer Datuk Shahril Ridza Ridzuan had said last month that it will let RHBCap and MBSB decide on possible merger plans. The EPF holds a 44.84 per cent stake in RHBCap and 65.5 per cent share in MBSB. Meanwhile, MBSB chairman Tan Sri Abdul Halim Ali said the board of directors is unaware of any plans, is not in talks and has not received any proposals by the shareholders to merge with RHBCap.

Live within your means, get insurance

Siti Aminah Hj Abd Rahman, senior officer in Wealth Management at Baiduri Bank, spoke during a financial planning forum at the Ministry of Finance. She said a person's expenditure and lifestyle should be based on his or her income and explained the four concepts of financial planning. She also urged participants to consider insurance to protect themselves and loved ones, and added that those who are looking into investing should make sure to study the investment. Takaful Brunei Keluarga Senior Executive Officer Noor Amal Fitriyah Abd Rahim, emphasized the importance of insurance during her speech and recommended to being prepared to settle and manage debts as part of financial planning.

'It's intimidation,' says Azrul, as Bank Islam steps up action

Suspended Bank Islam chief economist Azrul Azwar Ahmad Tajudin is facing disciplinary action after airing his views on political issues. Azrul himself classified the police’s intervention as an intimidation and harassment tactic whereas a member of parliament described it as a manifestation of the standard of governance in the local banking scene.

Malaysia to allow business trusts

It is expected that Malaysia will permit business trusts which will be listed on the local exchange. The purpose is to increase primary-market volume and attract domestic infrastructure companies in order to prevent them from being lured abroad. Berjaya Sports Toto has already made its plans directed abroad. It is about to raise an amount of nearly S$500m (US$401m) from the IPO in Singapore of Sports Toto Malaysia. The choice of destination of the issuer of the business trust has alerted local companies.

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