Archive for November 2008
Moody’s sees slower Islamic banking growth
Points of Essence:
- Moody’s predicted a slower growth for Islamic banks despite them showing some resistance to the global financial crisis. The available data on the financial performance and liquidity in the 4th Q suggested a slow down next year. The fact that Islamic banking does not work in isolation from the crisis prone financial system, whatever issues boggling the financial system, the Islamic banking may be as well implicated. Zawya has the report.
Saturday, Nov 29, 2008
Gulf News
Dubai: Gulf-based Islamic banks, which have displayed resilience amid the current global financial turmoil, will see a slowdown in asset growth next year, ratings agency Moody’s said in a report.
CIMB Islamic launches 1st Syariah-compliant product in Hong Kong
Points of Essence:
- CIMB Islamic recently launched its Commodity Murabahah Deposit via its Islamic window in Hong Kong. Using commodity products as underlying assets, the Islamic money market instruments will tap into the potential market of Hong Kong as a vibrant Islamic financial hub as well as providing a window for the mainland market.
HONG KONG: CIMB Islamic, the Islamic banking arm of Malaysia’s second largest bank CIMB Group, on Tuesday launched its first Syariah-compliant product in Hong Kong and signed the first transaction with Hong Leong Bank for its Commodity Murabahah Deposit.
The product will utilise commodities like crude palm oil, metal or any tradeable commodities as its underlying asset.
CIMB Islamic chief executive officer Badlisyah Abdul Ghani said the Hong Kong Monetary Authority (HKMA) gave its clearance last week for the launch of the interbank money product.
“It is important for CIMB Islamic to be here because Hong Kong has great potential as an Islamic financial market,” he said.
HKMA deputy chief Eddie Yue witnessed the the memorandum of understanding signed between the Hong Kong branches of CIMB and Hong Leong, the first institutions based here to offer Islamic banking.
Hong Kong is charging ahead into developing an Islamic banking centre to tap the huge global Islamic assets that are estimated to reach US$1 trillion by 2010.
Badlisyah said the launch marked the opening of CIMB’s Islamic banking window not only in Hong Kong but also to mainland China where the group had acquired a 20 percent state in the Bank of Ying Kou in north-eastern Liaoning province earlier this year.
CIMB Islamic plans to expand from wholesale Islamic banking business in Hong Kong to other activities, namely asset management, and if viable, consumer banking.
“But in the long term, the biggest opportunity and probability is to do wholesale business and asset management. We are looking at a timeline of three to five years. Consumer banking is still quite remote,” he told Bernama.
The Commodity Murabahah Deposit based on the Islamic principle of Murabahah gives fixed returns to investors and is widely used in the global Islamic market to facilitate deposit-taking. It works through the purchase and subsequent sale of a commodity at cost plus a specified profit.
CIMB obtained Bank Negara Malaysia’s approval last December to undertake Islamic banking operations in all its overseas branches.
Hong Kong is an important platform into mainland China to which all eyes are turned to remain a growth engine for the stuttering world economy in the wake of the global financial crisis.
“When the market is opened to us, through our Hong Kong branch as well as Bank of Ying Kou, we will see how to develop wholesale banking, asset management and consumer banking on the mainland,” Badlisyah said.
The viability of starting consumer banking would have to be closely evaluated because the Muslim population was distributed widely across China, raising the question of how to service the market, he said.
“What we are going to concentrate on is the easy part, bringing what we have from Malaysia into this market. I think as for the mainland, the proper timeline is one to two years rather than immediate,” he added.
CIMB Islamic is a global player in the industry and is the world’s largest sukuk or Islamic bond issue with a 20 percent share worldwide.-Bernama
Lessons Islamic finance can learn from current crisis
Points of Essence:
- Central Bank of Bahrain has urged the Islamic finance stakeholders to learn from the current financial crisis despite Islamic finance being sheltered from the impact. The in-built crisis resilient elements i.e risk diversification, effective liquidity management and sound corporate governance will need to be installed to ensure a stable Islamic financial system.
By Habib Toumi, Bureau Chief
Published: November 25, 2008, 23:15
Manama: The Islamic financial industry must remember the importance of risk diversification, good liquidity management, and sound corporate governance if it is to continue to enjoy a framework for stability against the background of global financial turmoil, the governor of Bahrain Central Bank has warned.
Islamic Development Bank Plans to Issue Sukuk
Points of Essence:
- IDB will issue sukuk to source aid funds for crisis affected member countries. For this purpose, a team has been set up to address the impact of the global financial crisis and identify investment projects in Muslim countries. Another team was was also established led by the Malaysian former premier, Tun Dr Mahathir Muhammad to set the new vision for the IDB to better assist Muslim countries and coordinate the cooperation among them for their mutual benefits. Zawya has the report.
JEDDAH – The Islamic Development Bank (IDB) will issue Sukuk (Islamic bonds) in order to collect funds from the international market place so as to support member countries affected by the global financial crisis.
Dr. Zeti: Sustaining Malaysia as a Platform for International Islamic Finance
Points of Essence:
- The Islamic banking in Malaysia continued to record growth with assets size stood at RM234.9 billion, a jump of 23 % from the previous year. The industry accounted for 16.7% of total assets in the industry. With a total deposit of RM180.4 billion (27.7% increase from last year) and a hike of 24.5% in total financing to RM143.4 billion together with 93 new full-fledged Islamic banking branches opened this year, Malaysia is expected to maintain its lead in Islamic finance.
- On the capital market side, the Malaysian sukuk market had a comfortable average annual growth of 22 % since 2001. Building up its niche in structuring innovative Islamic financial instruments, a slump in the sukuk issuance had no effects on Malaysia as the demands for more innovative products like Sukuk Musharakah had increased to 84% surpassing 58% mark of the total sukuk issuance in 2007. More new products have been churned out including residential mortgage backed securities, Commodity Murabahah deposit products, commodity based financing, credit card based on ujrah, as well as, structured products based on Musharakah, Mudarabah and Ijarah.
- A conducive environment for innovative advancement that is supported by a regulatory framework will always be the hallmark of lslamic finance in Malaysia. as that ensures not only the stability of the system but also promotes the active and vibrant functioning of the system. The liberalization of the Islamic finance industry with the setting up of foreign Islamic subsidiaries in its Islamic financial system will enhance the outreach of Islamic finance and strengthen Malaysia’s international linkages. With all the framework put in the right places, Malaysia is set to sustain its status as an Islamic finance leader. Read the full speech by the Malaysian central bank’s governor when opening HSBC Amanah Malaysia in Kuala Lumpur recently.
Governor’s Address at the Launching of HSBC Amanah Malaysia Berhad: “Sustaining Malaysia as a Platform for International Islamic Finance”
| Speaker : Governor Tan Sri Dato’ Sri Dr. Zeti Akhtar Aziz Venue : Kuala Lumpur, Malaysia Date : 25 November 2008 Language : English |
It is my pleasure to be here today at this official launch of “HSBC Amanah Malaysia Berhad” (HSBC Amanah). This launch is significant in a number of respects. It reflects the continued expansion of Islamic finance in Malaysia , taking place at a time of great uncertainty in the global financial system. The launch of HSBC Amanah, as an Islamic subsidiary of an international financial group, is also significant as it will contribute towards enhancing further the international dimension of Islamic finance in Malaysia , thus strengthening our international financial and economic linkages with other parts of the world.
Brunei approves Islamic Banking Order 2008
Points of Essence:
- Brunei has undertaken a massive revamp of its Islamic finance regulation and supervision. Islamic Banking Order 2008 and Takaful Order 2008 were introduced as part of the legislative reforms. This set of legislation aims at better regulating and supervising of Islamic finance. It is uncertain whether Brunei will also come up with a legislation on Islamic investment and capital market. Apart from providing condusive environment for enhancing the growth of Islamic finance business in Brunei, the two Orders will encourage competition among Islamic finance players. Brunei Times has the report.
Order to expand and strengthen Islamic banking and takaful
Minister of Finance 2, Pehin Orang Kaya Laila Setia Dato Seri Setia Awang Haji Abd Rahman Hjai Ibrahim
BRUNEI MUARA
Tuesday, November 25, 2008
Focus will be on captive insurance, re-insurance centre takaful & re-takaful
BY THE consent of His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam, the Ministry of Finance recently introduced the Islamic Banking Order 2008, aimed at expanding the Islamic banking sector in Brunei at the same time increasing the competitiveness among players by creating a level playing field as well as strengthening the supervision and regulation of Islamic banking activities.
Islamic banking: Sharia-compliant institutions buck trend
Points of Essence:
- Islamic banks in the UK continues to record growth while their conventional counterparts are in shambles in the aftermath of the credit crisis. Financial Times has the report.
By David Oakley, Capital Markets Correspondent
The banking community in the City of London has been hit hard by the economic crisis. But one area of the UK’s financial sector has emerged relatively unscathed from the credit crunch – the new Islamic banks.
IBFIM Plans To Offer Islamic Financial Planner Programme Overseas
Points of Essence:
- Malaysian based Islamic finance training provider, IBFIM mulls into exporting its Islamic Financial Planner program (IFP). IFP will cater to the need to provide effective financial planning, as planners needed to acquire expertise in developing new financial planning models, strategic analysis, investment advice and tax planning.
KUALA LUMPUR, Nov 24 (Bernama) — Recognising the importance of the Islamic financial market, the Islamic Banking and Finance Institute Malaysia (IBFIM), plans to export the Islamic Financial Planner (IFP) programme overseas.
Islamic finance seminar in Malta
Points of Essence:
- An Islamic finance seminar will be held in Malta on November 28, 2008. Organized by the Malta Institute of Management (MIM), the Malta Union of Bank Employees (MUBE) and the Malta Employers Association (MEA), the seminar is in support of the efforts made by the Malta Financial Services Authority to explore into Islamic finance.
Posted on November 24th, 2008
The Malta Institute of Management (MIM), the Malta Union of Bank Employees (MUBE) and the Malta Employers Association (MEA) shall organise the second Islamic Finance Seminar in Malta on Friday 28 November 2008 at 5.00pm at the Radisson SAS Baypoint, St Julians.
The Malta Financial Services Authority is now examining and analysing the possibility of Malta tapping into the opportunity of Islamic Finance. It has issued a consultation to which various feedback was given from the financial services industry.
Singapore Develops Sukuk Issuance Facility To Promote Islamic Finance
Points of Essence:
- Singapore is set to provide a sukuk issuance facility to promote Islamic finance in the city-state. Financial institutions have already expressed interest and the first issuance is expected to be out early next year.
SINGAPORE, Nov 24 (Bernama) – Singapore is in the final stages of setting up a sukuk issuance facility to provide Syariah-compliant regulatory assets to financial institutions as part of its efforts to promote the growth of Islamic finance in the city-state.
UAE intervenes in merger as property woes mount
Points of Essence:
- As the real estates in Dubai plunged deeper into crisis, the Government of the United Arab Emirates had to intervene in the recently announced merger of Amlak and Tamweel, the UAE’s largest mortgage lenders. The Government-owned Real Estate Bank was set up to address the issues of funding, liquidity and solvency faced by the two troubled institutions. The new Islamic bank bank will boost real estate sector in the UAE as more housing loans will reach the UAE nationals. The bank can now solicit for deposits from the public and have access to the federal funding, the privileges mortgage lenders are not allowed. Reuters has the report.
By Lin Noueihed
DUBAI (Reuters) – Two of the United Arab Emirates’ largest mortgage lenders, already on track to merge, will be brought under a government-owned bank, the UAE finance ministry said on Sunday, in the first sign of federal government intervention in Dubai’s troubled property sector.
Trading in both Amlak AMLK.DU and Tamweel TAML.DU, which have been struggling amid the global credit crunch, was suspended after the finance ministry said it would supervise their merger under the government’s Real Estate Bank to ensure a fair valuation and protect shareholders.
Islamic finance yet to capture Germany’s imagination
Points of Essence:
- Despite a high potential of Islamic finance and its European counterparts gearing to adopting Islamic finance, Germany remains unperturbed by these developments. There have been some Islamic finance activities conducted by foreign or its major financial institutions but the accommodating legal and tax structure is yet to be seen. Asiaone has the report.
By Etienne Balmer
FRANKFURT – Despite a huge potential client base, Germany has proven reluctant to adapt its legal and tax systems to attract Islamic finance, which has enjoyed stellar success in Britain.
Two-day seminar for professionals on Islamic Finance Qualification
Points of Essence:
- Qatar based Execu Train will hold a crash course on Islamic finance qualification (IFQ). IFQ is developed by Securities and Investment Institute UK and its lectures are conducted by Indian and Sri Lankan banking practitioners.
DOHA: A leading computer training firm here will hold a two-day seminar on Islamic Finance Qualification (IFQ) to professionals who want to be globally recognised on Islamic banking and finance.
CBB highlights training and development as key driver to success
Points of Essence:
- The Central Bank of Bahrain believes that a continuous and strategic investment in the training and development of its human talents will lead to a success of the institution. Islamic banking and finance is one of the priority areas. Ameinfo has the report.
The Central Bank of Bahrain (CBB) highlights training and development as a key driver to success.
Dr. Huda, Executive Director – Corporate Services, CBB, says:
‘Enhancing the capabilities and skills of the CBB staff is one of our core responsibilities.’
In order to achieve this; the CBB has adopted a rigorous strategy to recognize training requirements for the staff both collectively and individually in order to set out the necessary training programs which best meet those requirements.
London a natural home for Islamic finance
Points of Essence:
- The availability of key components of robust frameworks, leading advisory firms, strength and depth in capital markets and intellectual capital, makes London a natural base for Islamic finance. Zawya has the report.
Islamic Finance Council UK Executive Board Member Omar Shaikh
23 November 2008
The UK Pavilion at the 15th World Islamic Banking Conference (WIBC) in Bahrain demonstrates that despite its origins overseas, Islamic finance has found a natural home in London and the UK.
This is the second time the event has supported a UK Pavilion, hosted by UK Trade and Investment (UKTI), and reflects growth plus the diversity and complimentary skills UK companies contribute to Islamic finance.
Islamic Finance Council UK Executive Board Member Omar Shaikh said:
Cagamas Favors Islamic Bonds to Boost Investor Demand (Update2)
Points of Essence:
- Malaysia’s home loan buyer, Cagamas, will increase its Islamic bond sales to boost demand for Islamic bonds. As mortgage backed bonds are avoided because of the subprime issues, now sukuk has a better prospect of being the alternative. Bloomberg has the report.
By Soraya Permatasari
Nov. 20 (Bloomberg) — Cagamas Bhd., Malaysia’s biggest buyer of home loans, plans to increase sales of Islamic bonds as part of an effort to boost investor appetite for its debt after mortgage defaults triggered the global credit slump.
