Posts Tagged ‘Malaysia’
Malaysian court rules divisive Islamic contract valid
Points of Essence:
- The Malaysian court of appeal has finally delivered a verdict which is in favor of Bai Bithaman Ajil. The controversy surrounding this Islamic home product in the global Islamic banking arena is well known which is further exacerbated by lower court rulings holding the product contractual document invalid. However, the latest ruling by the second highest court in the court upholding the validity of the product’s contract will be at least for now set a clear direction for Islamic finance in the country. Reuters has the report.
KUALA LUMPUR, April 1 (Reuters) – A Malaysian court has ruled that a popular but controversial Islamic finance contract is valid, a move expected to boost sharia banks in Southeast Asia’s most developed Islamic financial market.
The bai bithaman ajil or deferred payment sale contract is the mainstay of Malaysia’s Islamic finance industry and is commonly used in home loans. But some religious scholars, especially in the Gulf, say it is an interest-based loan cloaked in Islamic dress.
Malaysia: Islamic Banking Should Be Most Important Agenda For Government
Points of Essence:
- The Government is urged to tap Islamic banking as an energy capacity tool in future. With the current pool of the talents in the area, the agenda will be seamlessly carried out. But it is cautioned against the advances of other countries in promoting Islamic finance which may overshadow the Government’s existing accomplishments. Bernama has the report.
KUALA LUMPUR, March 27 (Bernama) — The government is urged to make Islamic banking as one of the most important agendas in efforts to build energy capacity in future.
The representative from the Pahang Umno Liaison Body, Amiruddin Mohd Said, who made the proposal when tabling the motion on economy at the Umno general assembly 2008, here today, said Malaysia had the expertise needed to realise the agenda.
Read the rest of this entry »
Malaysian bourse to launch Islamic platform in June
Points of Essence:
- Malaysia’s stock exchange created the Commodity Murabaha House system to facilitate commodity murabaha transactions by Islamic institutions. With a market worth more than $100b, the platform looks set to accommodate the structure of financing which reflects real economic activities. This is amid the reservations from scholarly institutions on its validity. The Financial24 has the report.
Posted by:mark
Malaysia’s stock exchange will launch in June a platform to allow banks to execute a popular but controversial Islamic contract with a market worth more than $100 billion.
Bursa Malaysia’s Commodity Murabaha House system will enable Islamic institutions to carry out commodity murabaha transactions which are commonly used to structure sharia bonds, financing and derivatives, said Norfadelizan Abdul Rahman, Bursas head of product development for Islamic capital market.
Malaysia gives out more Islamic fund licenses
Points of Essence:
- New fund management licencees, Aberdeen Islamic Asset Management, BNP Paribas Islamic Asset Management and Nomura Islamic Asset Management made up a total of 8 foreign fund managers allowed by the Securities Commission to operate Islamic fund operations in Malaysia. As Malaysia allows 100% foreign ownership of the Islamic fund management companies, it has gained interest from global key players with some have already set up offices in the country. This will augur well for Malaysia’s global hub ambition. The Asian Investor has the report.
By Rita Raagas De Ramos, 2 February 2009
The country steps up efforts to become a global hub for Islamic investments by awarding licenses to Aberdeen, BNP Paribas and Nomura.
Malaysia’s Securities Commission has awarded three new foreign Islamic fund management licenses to Aberdeen Islamic Asset Management, BNP Paribas Islamic Asset Management and Nomura Islamic Asset Management. That brings to eight the total number of fund houses allowed to operate Islamic fund operations in the country.
KL seeks global standards on Islamic banking
Points of Essence:
- Malaysia advocates issuance of global standards for Islamic banking with a preliminary meeting to be held in Kuala Lumpur soon to discuss the initiative. The Star has the report.
DOHA (Qatar): Malaysia has proposed a meeting be held to set up global standards for Islamic banking and finance, Prime Minister Datuk Seri Abdullah Ahmad Badawi said.
Abdullah said he had discussed this with Qatar Prime Minister Sheikh Hamad Jassem Jabor Al-Thani during meetings yesterday and had proposed for the first meeting to be held in Kuala Lumpur.
Debate over commodity murabahah
Points of Essence:
- It is not always rosy for Islamic financial products which often become subjects of differing views from Islamic scholars on their Shariah compliance. The newest product adopting the concept of commodity murabahah is of no exception. Initially introduced as a money market instrument, it has expanded to other spectrum of financial products. The trade elements tied to the product structure with pre-determined profit rate completing the backbone, commodity murabahah is generally accepted, albeit with caution.
- Even with one edict banning it claiming its similarity with with interest bearing elements and the other to condition it upon the numbers of contracting parties, this looks like the best bet we have so far as conceptual wise, it is globally accepted. Thus, until we find a better alternative, this product is here to stay. The Star has the report.
Some Islamic scholars think commodity murabahah should be avoided as much as possible, saying it closely resembles an interest-bearing transaction. Is there a better alternative financing structure?
THE concept of commodity murabahah (or tawarruq in some jurisdictions) has only recently been widely applied in Islamic finance, along with other syariah contracts such as mudarabah, musharaka and bai murabahah.
The application of this trade-related structure with a pre-determined profit rate (or pre-agreed “margin” or “mark-up”) is possible in syariah-compliant financing and deposit products as well as in liquidity management/treasury instruments and other investment products/securities.
However, resistance still exists on the ground from some critics who say that commodity murabahah-based financial products bear a striking resemblance to interest-based products.
Malaysia needs to extend Islamic finance leadership
Points of Essence:
- In view of the stiff competition and growing interest in Islamic finance worldwide, Malaysia needs to reassess its talent scouting and retaining policy. Otherwise, it will lose out to other competitive markets. Bernama has the report.
Kuala Lumpur: Malaysia needs to rethink existing paradigm to solidify its leadership in the Islamic finance industry as more countries are jumping into the bandwagon.
“The race is on (in the Islamic finance sector). There is stiff competition from other financial centres,” Bank Negara Malaysia’s assistant governor Datuk Muhammad Ibrahim said Monday.
Significant Events on Islamic Finance in Malaysia
Points of Essence:
- Harbajan Singh of the Malaysian Reserve outlines significant events affecting Islamic finance in Malaysia. Among others, a Malaysian High Court judgement on BBA and the AAOIFI ruling on Sukuk compliance. Both had sent the market players back to their drawing board to re-assessing the compliance issues. Despite the gloomy global economic outlook, Malaysia continued to attract foreign players chose to set up their Islamic units there. 3 new global and regional Islamic units had been allowed to operate in Malaysia. The establishment of International Sharia Research Academy for Islamic Finance had set a milestone in conducting leading researches on Shariah issues in Islamic finance.
Sukuk pronouncement, BBA judgement grab headlines in ‘08
By Habhajan Singh
Two pronouncements – one a judgement by the Malaysian High Court and another a view expressed by a renowed international Shariah scholar – grabbed the headlines in the world of Islamic finance in 2008. These two milestones were selected by The Malaysian Reserve as the most significant events for the Islamic finance sector last year following feedback from industry players and the Islamic finance teaching fraternity.
In February, Sheikh Muhammad Taqi Usmani created a storm in the industry when he remarked that a good number of Islamic bonds, or sukuk, were not Shariah-compliant; while High Court judge Justice Datuk Abdul Wahab Patail, in a written judgment dated July 16, ruled that the application of the Al-Bai Bithaman Ajil (BBA) contracts in the Arab-Malaysian Finance Bhd vs Taman Ihsan Jaya cases were contrary to the Islamic Banking Act 1983 (IBA).
The ruling, which took local Islamic bankers by surprise, was first reported by Read the rest of this entry »
Don: Better knowledge of Islamic financing needed
Points of Essence:
- Inceif, an Islamic finance training outfit, collaborated with Britain’s University of Reading to offer a masters course on investment banking and Islamic finance. Commencing in September, the 12 month course aims towards filling in the knowledge gap in the Islamic finance to take the industry to a greater height. Bernama has the report.
KUALA LUMPUR: The lack of understanding of Islamic financing needs to be addressed so that people are not confused and misguided, says International Centre for Education in Islamic Finance (Inceif) chief academic officer/dean Prof Datuk Dr Syed Othman Alhabshi.
He said even some employees who worked at Islamic banks couldn’t fully understand the concept of syariah-compliance.
Aseambankers deals
Points of Essence:
- Malaysia based Aseambankers is seeking to forge an alliance with Japanese financial institutions to develop Islamic capital market products. This being part of the plan to enhance the sukuk market in Japan via the MIFC platform. As the investment arm of Malaysia’s largest bank, Maybank, Aseambankers is strategizing for a global expansion to Indonesia through Maybank’s latest aquisition of BII and also leveraging on Maybank’s strong presence in Hong Kong and Singapore. Business Times has the report.
By Roziana Hamsawi
A few financial conglomerates from Japan have expressed interest to work with Aseambankers Malaysia Bhd in developing Islamic capital market products, its chief executive officer Mohammed Rashdan Mohammed Yusof said.
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.
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.
Reliance Capital to launch Islamic funds in Malaysia
Points of Essence:
- Newly licensed foreign fund management company in Malaysia, Reliance Capital will launch Islamic funds within 8 months. Reliance, which is the largest mutual fund in India is expanding overseas. Apart from Malaysia, the company is eyeing setting up operations in the Gulf.
By Nishant Kumar
MUMBAI, Nov 20 (Reuters) – India’s Reliance Capital Ltd will launch Islamic funds in Malaysia in about eight months following an approval it got to set up an asset management company in the southeast country, a top official said.
Malaysia to further liberalize its financial sector
Points of Essence:
- Malaysia is preparing a blueprint to further liberalize its financial sector, both conventional and Islamic Islamic financial sector as it is keen to attract foreign investments. This will boost its profile as a leader in the global Shariah bond market. The Guardian has the report.
Malaysia to further open sharia banking system
- Reuters, Thursday November 20 2008
By Liau Y-Sing and Varsha Tickoo KUALA LUMPUR, Nov 20 (Reuters) – Malaysia will further open up its Islamic finance sector to foreign investors, the central bank chief said on Thursday, as it faces increasing competition to retain its position as the leader in the global sharia bond market.
Malaysia grants banking licences to foreign banks
Points of Essence:
- Two new Islamic banking licences were granted by the Malaysian central bank to Kuwait’s Al-Aqeelah and Indonesia’s Bank Muamalat. Both may now conduct Islamic banking business in foreign currencies.
Bank Negara awards Islamic banking licences
KUALA LUMPUR: Bank Negara awarded two foreign currency Islamic banking licences to companies in Kuwait and Indonesia as it seeks to broaden the country’s syariah finance success beyond the domestic market.
Repositioning Islamic finance for global market
Points of Essence:
- Malaysia has outlined few measures to globalize its Islamic banking and finance industry to tap the potential market worldwide. Announced by the Deputy Prime Minister Datuk Seri Najib Tun Razak, among the measures are:
- to conduct more research and discourses on Islamic finance carried out at all levels and should involve regulators, practitioners as well as academicians;
- To improve investment in human capital;
- To have a resilient and facilitative legal and regulatory framework;
- To adopt more accommodative dispute resolution mechanisms to the application of Islamic legal rules and methods;
- To have other related regulations and supervision of Islamic banks and financial institutions at par with international standards;
- To develop new supervisory and regulatory procedures and make modifications to the existing structures or procedures
Re-Position Islamic Banking & Finance, Says Najib
KUALA LUMPUR, Nov 18 (Bernama) — The Deputy Prime Minister, Datuk Seri Najib Tun Razak today outlined general work plans to position and re-position Islamic banking and the finance industry to enable it to fully exploit the potential market of one billion Muslims worldwide.
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