Zecon proposes BAIDS
Zecon Toll Concessionaire proposed to issue a US$16.27 million (RM60 million) Bai Bithaman Ajil Islamic Debt Securities facility to refinance its short-term loans and for working capital.
Affin Investment Bank was appointed the principal advisor and lead arranger for the issuance. With a tenure of up to 15 years, the facility was to be issued in 11 series from the date of the first issue.
Minetech Resources to issue debt
Minetech Resources was to issue up to US$27.12 million (RM100 million) Islamic debt papers to tap the competitive private debt securities market and reduce its borrowing costs for expansion. The issuance comprised a partially underwritten Murabahah notes issuance facility and an Islamic medium term notes issuance.
World’s first Islamic REIT IPO
The world’s first Islamic real estate investment trust (I-REIT) – Al Aqar KPJ REIT IPO – was launched with AmMerchant Bank appointed as the advisor, managing underwriter and sole placement agent.
Under the IPO, a total of 340 million units were issued and of these, KPJ Healthcare would hold 160 million units (47%), while 165 million units would be issued to institutional investors at US$0.27 (RM1) per unit and 15 million units to the public at US$0.26 (RM0.95) each. About US$49 million (RM180 million) was expected to be raised from the IPO.
Cagamas to sell bonds
Cagamas would sell US$550 million (RM2 billion) of bonds in the fourth quarter of 2006 as part of the Malaysian government’s plan to securitize some US$6.84 billion (RM25 billion) in civil servant loans. The bond details were not finalized, including the decision as to whether the bonds would be Islamic or conventional.
Bonds aimed at Malaysia
The Islamic Development Bank (IDB) would sell up to US$271 million (RM1 billion) worth of Islamic bonds in what would be its first ringgit debt offering.
Proceeds from the sale may later be swapped into another currency, Mohammad Tariq, director of treasury at the IDB, said. “We are keenly exploring the possibility of financing local currency long-term projects,” he added. “If ringgit projects aren’t available to deploy all the money, then the rest of the money may be swapped into dollars, or other currencies.”
First Islamic currency swap
Standard Chartered Bank Malaysia executed what it described as the first Islamic cross-currency swap in the world, together with Bank Muamalat Malaysia.
ARB to enter REIT market
Amanah Raya (ARB) was set to enter into the real estate investment trust (REIT) market by issuing a combination of conventional and Islamic funds worth US$272.3 million (RM1 billion) in the third quarter of 2006. The company would introduce its conventional REIT worth US$136.16 million (RM500 million) first, followed by its Islamic scheme before the year end.
RHB Islamic to tap agriculture sector
RHB Islamic Bank expected financing for agriculture to drive growth in Shariah compliant assets. The bank estimated a 20% growth in agricultural financing that may lead to an expansion of more than 10% in its assets in 2006. Financing for agriculture and small and medium-sized companies made up about 30% of RHB Islamic’s financing portfolio.
More Shariah auditors needed
There was a growing need for Shariah auditors in the Islamic financial system. Although Shariah-based businesses were growing, experts in the industry were still lacking, especially in the area of Shariah compliant audit. To date there was no independent Shariah auditor association that could act as a reference point to gather information on Shariah auditing standards.
Bank Islam losses
The sizeable losses suffered in 2005 by Malaysia’s first Islamic bank – Bank Islam Malaysia – were down to bad credit management rather than wrongdoing. The US$131.96 million (RM485.22 million) loss was mainly due to non-performing loans from its branch in Labuan.
Islamic banks less profitable
Malaysian Islamic banks were not making as much money as banks in the Gulf region, despite having a higher assets growth rate over the last decade. Malaysian Islamic banking sector assets grew at an annual rate of 27%, as compared to the Gulf’s 11% over the same 10-year period.
Gulf Islamic banks had a strong comparative advantage in the type of Islamic customers they attracted, and they were more inclined to place their funds in interest-free deposit accounts. Islamic banks in the Gulf also had higher gross income to asset yields and a less competitive operating environment.
Aseambankers now investment bank
Aseambankers merged with Mayban Securities and Mayban Discount to become an investment bank. The sale of the entire operations of the stockbroking business under Mayban Securities to Aseambankers was expected to allow the new investment bank to be a significant player in the domestic and regional equity markets.
Central Bank liquidity surplus cut
Bank Negara Malaysia’s total liquidity surplus was cut to US$1.82 billion (RM6.64 billion), of which US$1.07 billion (RM3.9 billion) was from conventional operations and the balance of US$750 million (RM2.74 billion) was in Islamic funds.
DIG to acquire 40% stake in BIMB
Dubai Investment Group (DIG), via its subsidiary, Dubai Financial, signed an agreement to acquire a 40% stake in Bank Islam Malaysia.
Under the agreement, DIG and Malaysian state fund Tabung Haji agreed to take control of Bank Islam Malaysia – which was in need of fresh capital – for US$272 million (RM1 billion). The Dubai group bought the stake from state-owned BIMB Holdings for US$225 million (RM827.16 million).
BIMB issues Islamic platinum card
Bank Islam Malaysia (BIMB) became the country’s first issuer of an Islamic platinum credit card when it launched its platinum Mastercard.
Bank Muamalat 8% increase
Bank Muamalat Malaysia targeted an 8% increase in deposits this year by attracting new customers while retaining existing ones. The Islamic bank’s deposits stood at US$1.92 billion (RM7 billion).
TAKAFUL briefs
Takaful Ikhlas higher revenue
Takaful Ikhlas expected a higher revenue of US$59.9 million (RM220 million) this year, from US$40.02 million (RM147 million) last year.
The company had also received approval from Bank Negara Malaysia to open regional offices in Sabah, Sarawak and Putrajaya.
It opened its east coast regional office in Kota Baharu in June and predicted a US$5.62 million (RM20.7 million) contribution from the new regional office for the financial year 2006/07.
MNRB to enter Dubai
MNRB Holdings (MNRB) had plans to enter Dubai before the end of 2006. The reinsurance firm was in the process of finalizing the plan to open a representative office, including obtaining clearance from relevant authorities.
The company was still awaiting approval from the Central Bank for the re-Takaful license it had applied for.
Jerneh to venture abroad
Jerneh Asia was assessing the feasibility of investing in the life insurance business in India, Vietnam and Myanmar, as the countries were close to Malaysia and had enormous growth potential.
MAA Takaful product by year-end
Malaysian Assurance Alliance (MAA) hoped to launch its new MAA Takaful product by the end of 2006, which it believed would represent one-third of its portfolio in the next five years.
Takaful Ikhlas in gold dinar link up
Takaful Ikhlas teamed up with Islamic gold dinar distributor E-Qirad to provide a comprehensive group Takaful scheme for those who invest in the Islamic dinar. The alliance with E-Qirad would provide those who purchase the gold dinar ringgit-for-ringgit Takaful cover.
In other news, Takaful Ikhlas would launch an investment-linked product and an insurance product for women by September. |
