Central Bank issues Ijarah Sukuk
Bank Negara Malaysia launched the first Bank Negara Malaysia Sukuk Ijarah on the 16th February 2006, with an issue size of US$107.54 million (RM400 million). Subsequent issues of this instrument from the Central Bank would occur regularly, ranging from US$26.89 million (RM100 million) to US$53.77 million (RM200 million).
KFH investment focused
Kuwait Finance House (Malaysia) (KFHM), one of the three foreign Islamic banks licensed to provide Islamic banking products and services in Malaysia, said it would concentrate on its investment banking and fund management business in the future.
Prinsiptek Islamic papers
The Securities Commission approved Prinsiptek’s plan to issue Murabahah Commercial Papers and Medium-Term Notes with a nominal value of US$21.5 million (RM80 million).
Saudi bank’s Malaysian plans
Saudi Arabia’s Al Rajhi announced plans to open 50 branches in Malaysia within five years, starting in the second quarter of this year.
Al Rajhi – the only Saudi Islamic bank licensed to operate in Malaysia – would offer retail and corporate products. Malaysia also awarded Islamic banking licenses to Kuwait Finance House and a consortium headed by Qatar Islamic Bank.
New Islamic fund from Public Mutual
Public Mutual, the largest private unit trust company in Malaysia, launched the Public Islamic Dividend Fund (PIDF) at an issue price of US$0.067 (RM0.25) per unit.
Free units of 1% were given away during the offer period from the 14th February to the 6th March 2006. The PIDF had an approved fund size of two million units.
Financing finalized for Shuaibah
Khazanah Nasional announced that Shuaibah Water and Electricity Co closed the funding for Shuaibah Phase 3 Independent Water and Power Project.
The US$2.5 billion (RM9.4 billion) total project cost was to be funded by a multi-tranche financing comprising commercial facilities of US$875 million (RM3.25 billion), Islamic financing of US$210 million (RM781.1 million), export credit financing of US$400 million (RM1.49 billion) from Hermes and US$455 million (RM1.69 billion) from Export-Import Bank of Korea.
Southern Bank reject “hostile” bid
Southern Bank rejected a US$1.7 billion (RM6.35 billion) takeover offer from Bumiputra-Commerce Holdings (BCH), which was believed to have hostile implications, and asked the Securities Commission to rule that BCH’s offer was prohibited action, contrary to the Malaysian Code on Take-overs and Mergers 1998. Southern Bank also stated it had already approached Bank Negara Malaysia to obtain the necessary approval to enter into negotiations with another major local financial institution. There was intense speculation that this institution was Maybank, although the bank denied it was in negotiations with any financial institution.
Public Bank make Asia General bid
Public Bank stated that it may make another bid for Singapore insurer Asia General Holdings if the opportunity arose. It said that its interest in acquiring an insurance business was “still strong and very positive.”
The bank’s bid made last year for the insurance business was beaten by Southern Bank, which has since scrapped its plans to buy Asia General.
Islamic index launched
The Dow Jones Islamic Market Sustainability Index was launched by Dow Jones Indexes and SAM Group. The world’s first index that merged Islamic investing principles and sustainability criteria, companies had to be components of both the Dow Jones Islamic Market Index and the Dow Jones Sustainability World Index to be included.
The Index represented Shariah compliant companies determined to be corporate sustainability leaders: 105 companies were included in the index.
DIG investment given the nod
Bank Negara Malaysia issued approval for Dubai Investment Group (DIG) to start due diligence on its proposed strategic investment of up to 49% of Bank Islam Malaysia’s enlarged issued and paid-up share capital.
Saudi bilateral deals
Malaysian and Saudi Arabian companies signed US$800 million (RM2.98 billion) worth of deals, as the leaders of their countries urged increased joint ventures and investment between the two countries.
In the biggest deal, Johor state investment arm, Johor Corp joined with Siraj Capital to offer US$500 million (RM1.86 billion) worth of Shariah compliant investment funds.
The companies would jointly launch a real estate investment trust (REIT) and a regional private equity investment fund (RUIF), both with an investment size of US$250 million (RM929.8 million). EON Bank Islamic subsidiary
EON Bank was expected to launch an Islamic banking
subsidiary within the next few months, commenting: “The incorporation of a subsidiary Islamic banking company is into its final stages. We can’t say much now as we have not received the approval yet.”
StanChart seeks new outlets
Standard Chartered Bank Malaysia (StanChart) announced its intention to apply to Bank Negara Malaysia to open four new branches in major cities across the country. Bank Negara had recently announced that locally incorporated foreign banks are allowed to open up to four new branches within 2006.
Largest ever bond sale
Bank Pembangunan Malaysia proposed a sale of up to US$1.87 million (RM7 billion) in Islamic and conventional medium-term notes (MTN) in Malaysia’s largest debt securities program ever. Joint lead arrangers and joint bookrunners for the program were CIMB and HSBC Bank Malaysia.
CIMB listing over
Shares in CIMB were suspended ahead of the complete delisting from Bursa Malaysia, as part of the restructuring of CIMB Bumiputra-Commerce Bank.
CIMB shares were listed from the 8th January 2003 until the 24th January 2006 – the shortest listing history, making CIMB one of Malaysia’s most successful listed companies, with a total shareholder return of 334% over three years.
TAKAFUL briefs
BNM announces new Takaful operators
Bank Negara Malaysia revealed the successful bidders for the four Takaful licenses granted by the government on the 30th January. The consortiums granted the licenses were:
– HSBC Insurance (Asia-Pacific) Holdings, Jerneh Asia and Kumpulan Wang Simpanan Pekerja.
– Hong Leong Bank, Millea Asia, Japan and Hong Leong Assurance.
– Bank Simpanan Nasional and Prudential Holdings.
– MAA Holdings and Solidarity.
In line with shareholding policy, the new Takaful operators were permitted to have foreign equity interest of up to 49%.
BSN/Prudential Takaful business ready in summer
One of the four successful bidders for Malaysia’s new Takaful licenses, the joint venture between Bank Simpanan Nasional (BSN) and Prudential Holdings, stated it would be ready to open for business by July 2006.
HSBC’s Takaful plans
HSBC Insurance (Asia Pacific) Holdings, revealed that in its joint venture Takaful company, HSBC Insurance would take up 49% of the equity for a consideration of US$13 million (RM49 million). Jerneh Asia would hold a 31% stake for US$8.33 million (RM31 million) and EPF would take 20%, injecting US$5.38 million (RM20 million) into the venture. The new company would be capitalized at US$26 million (RM100 million) and offer a range of life and general Takaful products.
MAA high expectations from Takaful JV
Malaysia Assurance Alliance (MAA) was confident that its Takaful joint venture (with Solidarity) would raise between US$26.89 million and US$34.96 million (RM100 million to RM130 million) in premiums within a year of starting up. The joint venture company would introduce at least nine Takaful products when it started operating in three months: four family Takaful and five general Takaful. |
