IslamicFinance.de

Foreign issuance of sukuk in Malaysia is anticipated to increase by 25%-30% next year from 10%-15% currently owing to the global economic calamities and eurozone sovereign debt crisis.
Amanie Advisors Sdn Bhd director Baiza Bain noted that the sukuk issue would be US dollar and ringgit denominated issues mainly from the Gulf Cooperation Council (GCC) and Europe.
Asian Islamic Investment Management Sdn Bhd CEO and executive director Akmal Hassan has a positive outlook regarding the fact that the Government's pump priming activities would ignore impact from the tough external environment and this would augur well for the local economy and Islamic investment.

PLUS Bhd’s record RM23.4 billion (US$7.3 billion) sukuk sale is attracting life insurers with higher-than-average yields and maturities of as much as 25 years.
The Malaysian company is taking over the nation’s biggest toll-road operator PLUS Expressways Bhd in the first leveraged buyout using syariah-compliant bonds. It seems that a portion of the total issue will be privately placed, at tenors of 20 to 25 years.
PLUS was set up by Malaysia’s biggest pension fund, the Employee Provident Fund, and government-owned UEM Group Bhd. to take over the highway assets of PLUS Expressways following their RM23 billion acquisition of the company.

Malaysia is awaited to continue its strong 60% contribution to global sukuk issuance next year, supported by projects under the Economic Transformation Programme (ETP).
HSBC Amanah stated that this year a significant growth in sukuk was noticed, principally driven by issuance out of the country.
HSBC remained optimistic about the future over the medium term but anticipated some challenges in 2012.

United Arab Emirates (UAE)'s leading businesswomen are researching investment opportunities to work with Malaysians in two areas - Islamic finance and halal food.
According to Fatima Al Jaber, president of the Abu Dhabi Business Women Council and chief operating officer of Al Jaber Group, Islamic finance and halal food are the two mutual areas that Malaysia and UAE could work together. She added that UAE offered huge opportunities for Malaysians in many areas including leisure, hotel, sports, property, healthcare and education.

The Islamic Corporation for the Development of the Private Sector has appointed Malaysia’s INCEIF to deliver its Chartered Islamic Finance Professional course for the ICD’s two-year Islamic finance talent development program.
The program will begin in January 2012 in Jeddah. ICD received more than 300 applications for the new program, which has the purpose to take in up to 24 participants in the future. Al-Aboodi, ICD's CEO, hopes that graduates will eventually work in Islamic finance jurisdictions where talent is lacking.

It is possible that Legal & General Gulf Takaful will set up business operations in Malaysia at some point to meet the growing demand for takaful products. The statement came from managing director, Manfred Maske.
Land & General Gulf Takaful is a joint venture insurance company formed in 2009 between Legal & General Group and Ahli United Bank.

It appears that a small window of opportunity has arised for Malaysia to spread its Islamic finance wings internationally.
Global University of Islamic Finance (Inceif) president and chief executive Daud Vicary Abdullah second that, adding that Malaysia should grab the chance to promote its Islamic finance sector globally, before the Middle East took hold of the international Islamic finance.

It seems that the Islamic capital market will maintain its growth momentum over the next decade. Its next phase of growth will be differentiated primarily by greater internationalization, which will help address some of the challenges faced by the industry and will offer Malaysia the opportunity to strengthen its position as a hub for Islamic capital market activities. This is the foresight of the Securities Commission of Malaysia, the securities regulator.
Greater internationalization of Islamic capital market will present itself in a number of key areas including product and service development; the provision of legal, Shariah and other advisory and intermediation services; a movement toward Shariah-based products as opposed to Shariah-compliant products; the channeling of savings into investments that create real businesses and jobs; and greater product distribution channels across borders and jurisdictions.

The 2012 budget with the theme "National Transformation Policy, Welfare for the Rakyat, Well Being of the Nation" was delivered in October 2011 by Malaysian Finance Minister Najib Abdul Razak to the Dewan Rakyat (National Assembly).
Judging by the previous election, the next one will be just as tense.
Prime Minister Najib being one of the most proactive supporters of the Islamic finance industry in the Islamic finance space, the provisions announced in the 2012 budget are part of a continuum of a strategy to improve the role of Kuala Lumpur as a major international hub for Islamic finance and especially an origination center for cross-border sukuk, as opposed to electoral opportunism.

Elaf Bank B.S.C. and Ohad Trust B.S.C. have formed a joint venture in Labuan, the result being the fact that Labuan Financial Services Authorities (LFSA) has granted a "trust" licence under Ohad Trust (Labuan) Bhd (Ohad Labuan).
the licence will give permission to Ohad Labuan to work on trust, foundations, fund administration, registrar and custody assignments in Malaysia.

It appears that Tenaga Nasional Bhd. (TNB) sold 4.85 billion ringgit ($1.5 billion) of Islamic bonds maturing in five to 20 years at yields between 3.80 % and 4.90 %.
The sukuk was sold in 16 portions and was priced at the lower end of the initial yield guidance.

Despite the existence of Shariah advisory councils, Islamic banks and financial institutions in Malaysia may be failing to carry out their duties. An article in this month’s JSSH investigates transactions on purchasing houses specifically on transactions involving houses pending completion using the current practice of ‘sale by deferred payment’ also known as Bay’ Bithaman al-Ajil (BBA).

Islamic banking gained foothold in Malaysia, with the establishment of Bank Islam Malaysia Berhad in 1983 and facilities have since expanded. Products include Wadiah - where the bank acts as the safe-keeper of deposits but may provide returns to the depositors as a gift; Murabahah, or partnership and equity financing; Ijarah – leasing; Musharakah – partnership and Bay’ Bithaman al-Ajil – sale by deferred payment. Nuarrual Hilal Md. Dahlan and Sharifah Zubaidah Syed Abdul Kader Aljunid looked at sale and purchase and loan agreement to see if they comply with the requirements of the Islamic Law in protecting stakeholders and to provide practical suggestions to improve the existing practice.

It is possible that the Commonwealth of Independent States will become the next frontier for Islamic finance. At this point, six Muslim republics of the former Soviet Union, Azerbaijan, Kazakhstan, Uzbekistan, Turkmenistan, Kirgizstan and Tajikistan are members of the CIS. Moreover, Russia has also 20m indigenous Muslims in Russia, mostly concentrated in the semi-autonomous Caucasus provinces of Chechnya, Ingushetia, Dagestan, Tatarstan and Bashkortostan.
Although the relationship between Russia and its Muslims wasn't very good, it has started to make concerted efforts to reach out to Turkey, Iran and the Arab nations to the south and Pakistan, Malaysia and the Islamic democracies of South East Asia.

It seems that Malaysia's central bank is thinking about allowing a more flexible cap on foreign shareholdings in banks.
An unnamed source stated that Bank Negara Malaysia has been in talks with the country's financial services industry, to supply feedback for the government in drawing up its second 10-year Financial Sector Master Plan blueprint expected to be disclosed by the end of the year.

Bank Alkhair is looking for small boutique banks in Malaysia to acquire, so that it can expand its presence in south east Asia and to win ringgit exposure.
The bank operates in Saudi Arabia, Malaysia and Turkey, primarily in the Islamic investment banking field.
Ikbal Daredia, CEO of its Malaysian operation, stated that Alkhair has put a target on some small institutions as takeovers, but underlined that nothing was going in the near future.

Malaysia’s 2012 Budget is to provide incentives increases Islamic finance, extending tax breaks on Sukuk issuance for a further three-year period.
Prime Minister Datuk Seri Najib Tun Razak stated that a tax deduction on expenses incurred for Sukuk Wakala will be offered for a three-year period from 2012 to encourage more Sukuk launches.

Alkhair International Islamic Bank Malaysia is asking approval from Bank Negara Malaysia to begin talks to obtain a Malaysian bank. The reason seems to be the fact that this will permit them to affirm into the ringgit business.
Alkhair International posesses a licence to carry out Islamic banking business in non-ringgit currencies.

A company official stated that Malaysia's stock exchange operator has the purpose to double the daily average trades on its murabaha platform from 1 billion ringgit ($313 million) next year as it develops its Islamic finance products in overseas markets.
One of the key challenges to the emerging Islamic finance industry is the lack of liquidity tools. The sharia banks being held back partly because of the limited range of products they can invest in.
Bursa Malaysia will develop its business in Middle Eastern countries such as the United Arab Emirates, Saudi Arabia, Kuwait, Qatar and Jordan. The statement was given by Norfadelizan Abdul Rahman, the exchange's Islamic markets' acting global head.

Islamic banks in the country Malaysia have been encouraged to present more short-term syariah-compliant products in order to attract foreign investors.
Dr Mohd Daud Bakar, Amanie Islamic Finance Consultancy and Education LLC managing director, stated that they always have investors in Malaysia looking for syariah-shariah compliant products.
He added that liquidity is not a problem in Malaysia because they have many products that can absorb the liquidity in the Islamic financial intuitions.

It appears that the mainstream Islamic finance industry has not directly got involved in the sector in any important way.
The Jeddah Declaration for the Achieving Food Security for example has mandated the IDB to allocate more resources to the agricultural sector, which any is a key component of the ordinary approvals of the group's regular financing facilities.
There are distinguishing exceptions especially in countries that are primary agricultural commodity producers and exporters including Turkey and Malaysia.