Islamic Finance Malaysia

Thursday, 29 November 2012

Malaysia: Islamic finance must include lower income groups for more balanced growth: Zeti

KUALA LUMPUR: Islamic finance must be inclusive and accessible to all particularly the lower income groups and small businesses so as to achieve a more balanced global economic growth with reduced income disparities, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Azizsaid.
To this end, she said Islamic financial institutions must strive to enhance the access of their financial services to all segments of society by meeting the demand for more Islamic microfinance products.
“In emerging as a new market niche, Islamic microfinance would meet the differentiated demands of low income communities and provide support to entrepreneurial activities,” she said at the 2nd International Shariah Research Academy for Islamic Finance (ISRA) Colloquium 2012 on Tuesday.
Islamic microfinance, if supported by microtakaful, has the potential to provide a more comprehensive, sustainable and accessible financing and protection solution for the lower income groups and small businesses.
Zeti also said the Socially Responsible Investment (SRI) is expected to become a mainstream asset class by 2015, reaching a projected total of more than US$26 trillion of asset-under-management, accounting for 15% to 20% of the global market.
This growth was mainly driven by the demand from institutional investors which are increasingly prioritising the consideration of sustainability and social responsibility in their business conduct and institutional value system.
“SRI has brought to the forefront the need for the financial system to be linked to the economy and for the need for greater and improved levels of transparency, fairness, ethics and social responsibility in modern finance,” she added.
On the Islamic Financial Knowledge Repository Portal that she launched today, Zeti said it can contribute in meeting the need for more efficient information dissemination that would promote greater market transparency, price discovery and industry insights.
As a knowledge database, the portal centralises Shariah rulings and its justifications, legal and regulatory requirements. This is enriched by the latest collection of research and development in Islamic finance.
“This database will become an important source of reference and guidance for Shariah and industry practitioners, policymakers, researchers and academicians,” said Zeti, adding this initiative will not only promote greater understanding but mutual respect and recognition of Islamic finance.
(The Star Online / 27 Nov 2012)

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Tuesday, 27 November 2012

Malaysia: Centre makes it easier for people to pay zakat

KUALA LUMPUR: Pusat Pungutan Zakat (PPZ) collects tithes and is a subsidiary of Federal Territories Islamic Religious Council (MAIWP).

Its chief executive, Mohd Rais Alias, said people could check with PPZ whether they had to pay zakat as owners of companies or individuals.
"You can come directly to the counter or seek information on our portal. We even calculate the amount you need to pay."
PPZ collects both property tithes and zakat fitrah. The latter is collected during Ramadan. This year, 10 counters in Kuala Lumpur, Putrajaya and Labuan were open every day throughout the fasting month for zakat fitrah collection.
"All counters are also open during office hours daily throughout December. Sometimes, we extend the operating hours. PPZ has been doing this since its inception in 1991."
He said PPZ had taken several measures to raise zakat collection, one of which was having a theme. This year's theme is "Year of Property Tithe".
"Based on the theme, we have an annual collection target."
Rais said these measures had raised the total collection of zakat annually and there had been a 63 per cent increase this year. This was proof that the level of awareness among Malaysians had increased.
He added that PPZ had provided many payment channels.
"We have also come up with an application called 'i-zakat' for Android smartphone users and appointed certain banks and agencies to collect zakat."

(New Straits Times / 25 Nov 2012)

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Malaysia: SC holds Islamic finance public lecture by Iqbal Khan

MALAYSIA (Nov 26, 2012): The Securities Commission (SC) will hold a public lecture by prominent Islamic banker Iqbal Khan, recipient of the prestigious Royal Award for Islamic Finance 2012, in Kuala Lumpur on Monday.
Titled "Our Markets, Our Values – A principles-based approach to creating value in Muslim majority markets", the lecture will focus on the developments and key issues in the Muslim-majority markets including values which had fundamentally driven the history and development of the Islamic finance industry.
The lecture will begin at 2pm and will be followed with a 30-minute Q&A session.
"This will be a platform for intellectual discussion and learning that provides an opportunity for the business community, academics, students and the public to understand the developments in Islamic finance globally," said the SC in a statement today.
Members of the public are invited to attend the public lecture. Attendance, while free, is by registration only.
(The Sun Daily / 26 Nov 2012)

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Tuesday, 20 November 2012

Malaysia continues to lead in Islamic banking development

KUALA LUMPUR (Nov 19, 2012): Malaysia will continue to be the global leader in developing and promoting Islamic banking systems, according to Roland Berger Strategy Consultants.
Its senior partner for Southeast Asia, Markus Bohme said Malaysia will face competition from member countries of the Gulf Cooperation Council (GCC).
He said there will be an automatic connection with the GCC countries and at the same time competition, but Malaysia is probably set for that in Asia.
"Many people are thinking about Malaysia as a product of Islamic investment banking, automatically the activity will be related to the Gulf region.
"It probably goes beyond the Islamic...Malaysia has relatively strong banks and very international banks which are Maybank and CIMB," he told the media during an Investment Banking Outlook briefing, here today.
However, Bohme said the global investment banking revenues were set to increase this year but more restructuring and consolidation schemes were expected.
He said global investment banking revenues were expected to grow by 10% this year but might post a low double-digit industry return-on-equity (ROE).
"Global investment banks have improved their performances over the past few months, but structural earnings problems persist," he said.
Despite the rebound in revenues and profitability as compared with 2011, he said there would be more restructuring, consolidating and a continued shift into emerging markets, beyond just the traditional financial hubs in Asia.
"Thus, around 40,000 investment banking jobs are expected to be cut in the next two years -- compared with the middle of 2011," he said.
(The Sun Daily / 19 Nov 2012)

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Monday, 12 November 2012

Malaysia: 20-year sukuk with 4.36% yield sold

KUALA LUMPUR: The Finance Ministry paid a 50 basis-point premium for a 20-year sukuk over non-Islamic sovereign debt, the biggest spread this year for government-guaranteed syariah-compliant notes.

Turus Pesawat Sdn, a company set up to sell the securities that will fund aircraft purchases on behalf of loss-making carrier Malaysian Airlined, sold RM3.4bil of debt in total, said two people familiar with the deal who declined to be named because the details are
private. The RM1.65bil portion of 2032 notes yielded 4.36%, the top end of the 40 basis-point to 50 basis-point guidance, they said.
“The higher pricing reflects the lower risk-appetite for the aviation business, which is very volatile, as well as the increase in supply of sukuk,” Michael Chang, who oversees US$1bil as head of fixed-income at MCIS Zurich Insurance Bhd, said in an interview yesterday. “Fifty basis points for a low-risk government-guaranteed paper is attractive, and is definitely worth holding.”
Falling yields on Islamic bonds have spurred a surge in issuance this year in the world’s biggest market for the debt. Sales more than doubled to a record RM84bil from RM35.4bil in the same period in 2011, according to data compiled by Bloomberg.
Turus Pesawat’s offering of sukuk, which pay returns on assets to comply with Islam’s ban on interest, is part of a RM5.3bil 20-year programme.
The company also sold RM500mil each of 10- and 12-year syariah debt yesterday at yields of 3.74% and 3.93%, representing premiums of 30 basis points and 40 basis points,. It issued RM750mil of 15-year notes at 4.12%, a 45 basis-point spread, they said. A basis point is 0.01 percentage point.
MAS sold RM1bil of Islamic bonds with no fixed maturity in June via a private placement at a yield of 6.9%. It also issued RM500mil in September at the same rate.
MAS announced in May it planned to lease six Airbus A380s and two A330s from the government for RM5.3bil.
The airline is seeking to win back business from budget carrier AirAsia Bhd by expanding its fleet after reporting losses for six straight quarters through June.
The sukuk are based on the syariah principle of Murabaha, a three-party transaction where a financial institution buys the goods from the supplier on behalf of the customer and sells them back at a markup.
(The Star Online / 09 Nov 2012)

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