SSF Shariah compliant
Single Stock Futures (SSF) were to be regarded as Shariah compliant instruments by the Shariah Advisory Council of the Securities Commission, provided that the underlying stocks of the SSF were Shariah compliant.
JV Islamic investment in Middle East
CIMB Group (CIMBG), a wholly owned subsidiary of Bumiputra-Commerce Holdings, partnered Yusuf Bin Ahmed Kanoo Holdings in the establishment of a joint venture entity in Bahrain.
Both CIMBG and Kanoo would have a 50% equity interest in the CIMB-Kanoo Islamic Investment Company, which would provide Shariah compliant merchant or investment banking services. CIMB-Kanoo Islamic Investment Company had an initial issued and paid-up capital of US$20 million (RM74.33 million).
Pilgrims to bank overseas
Bank Islam Malaysia announced its intention to tap into the huge membership of Tabung Haji, which is also its majority shareholder, in order to boost the growth of its consumer banking arm, the revenue of which it expects to rise by 25% in 2007.
Bursa/FTSE new index series
Bursa Malaysia, in association with the FTSE Group, launched the first phase of the new FTSE Bursa Malaysia Index Series. The series, comprising six new indices, would cover all Malaysian markets and segments by size, focusing on investability and transparency, which allow the creation of new investment products, such as Exchange Traded Funds as well as new derivatives and over-the-counter products.
Boustead to develop I-REIT
Boustead Holdings announced it was developing a US$155.4 million (RM570 million) Islamic real estate investment trust (I-REIT) to be listed on the main board of Bursa Malaysia.
Boustead subsidiary Boustead Properties would dispose of US$89.9 million (RM330 million) of assets for the I-REIT. Affin Bank and Pacific Alliance Capital had been mandated by Boustead as joint advisors.
Islamic professional certification
The Financial Planning Association of Malaysia (FPAM) signed an MoU with the Islamic Banking and Finance Institute of Malaysia (IBFIM) to develop the Islamic Certified Financial Planner (iCFP) professional qualification, an exam-based professional qualification catering to professionals in the Islamic financial services industry.
Kinsteel to issue Murabahah notes
Steel-maker Kinsteel was planning to offer up to US$110 million (RM400 million) medium-term Murabahah notes to refinance bank debt and pay money owed to Tenaga Nasional. The bonds would be issued by its Perwaja Steel unit, a major debtor of Tenaga, and repaid in stages over 10 years.
Race to acquire SIBB
Amanah Raya (ARB) joined the race with Hong Leong Credit to acquire Southern Investment Bank (SIBB). While Hong Leong Credit was seeking Bank Negara Malaysia’s approval to start negotiations with SIBB shareholder Bumiputra-Commerce Holdings, ARB was waiting for approval from the Finance Ministry before proceeding.
ARB planned to partner finance house Macquarie Malaysia in bidding for SIBB, but had still to decide on the shareholding structure of the venture. ARB was to introduce an Islamic portfolio in October. No actual offer had been made for SIBB from either Hong Leong Credit or ARB.
Affin launches Islamic arm
Affin Bank officially launched Affin Islamic Bank to tap new development opportunities in the Islamic finance industry. This fully fledged Islamic bank would offer a comprehensive range of Shariah compliant products and services in enterprise and consumer banking.
BIMB tap Islamic finance sector
BIMB Holdings was set to become the first true-blue Islamic investment bank in Malaysia through the rationalization of its operations. The revamp would see the holding company of Bank Islam Malaysia offering private equity, asset management, securities business, unit trusts, Takaful, treasury activities and research to its customers.
KFH offers Islamic hedge fund
Kuwait Finance House Malaysia (KFH) offered the KFH Promissory FX Contract-I, which had a hedging mechanism to protect customers against fluctuations in foreign exchange rates. KFH was the first Islamic bank in Malaysia to receive approval to launch such a product, which complies with both Malaysia’s National Shariah Council and the Shariah Council of KFH in Kuwait.
Bank Islam posts 22% rise
Bank Islam Malaysia declared an increase in revenue by 22% to US$200 million (RM724.3 million) for the third quarter, while securing US$150.5 million (RM545 million) in non-performing loans.
IFSB to create new Islamic standards
The Islamic Financial Services Board (IFSB) announced its intention to introduce new or to complement existing international Shariah standards, in order to incorporate Islamic finance into the global financial system.
The IFSB noted that the absence of international standards in guidelines would impede the Islamic finance industry’s growth and hinder it from being fully integrated into the mainstream global financial system.
Jeweler to raise Islamic debt
Poh Kong Holdings aimed to increase its Islamic debt to US$54.5 million (RM200 million), to be used to refinance existing debt, repay shareholders’ and directors’ loans, as well as for working capital, capital expenditure and future investments. The issue was to be commercial paper ranging from 1 to 12 month maturity, and medium-term notes.
Islamic finance surpasses RM1bn
Bank Negara Malaysia announced that the local Islamic finance sector surpassed US$272 million (RM1 billion) in profits for 2005 the first time ever. Assets held reached US$27 million (RM100 million).
The Islamic banking and insurance sectors grew 19% and 25% respectively over recent years.
KPJ to increase Islamic REIT
Malaysia’s largest private healthcare group – KPJ Healthcare – proposed to increase the fund size of its Al Aqar KPJ REIT
to 340 million units, a 66% increase from its initial 205
million units.
TAKAFUL briefs
Allianz moves into re-Takaful
Allianz General Insurance Malaysia was in talks with one of the nine Malaysian Takaful operators to establish an offshore re-Takaful unit in Labuan.
Allianz said that the Takaful company chosen needed to represent Allianz’s standards, which included possessing good claims handlings, solid financial performance and the ability to develop new products quickly. Allianz had yet to apply for a license to underwrite and reinsure Takaful policies in Malaysia.
MAA Takaful venture set to go
MAA Holdings received approval from Bank Negara Malaysia for its proposed joint venture Takaful business with Solidarity, and expected to commence operations in August/September 2006. The company expected a 30% contribution from the Takaful business to the company’s overall turnover in the first two years.
BMS Asia launches re-Takaful unit
BMS Asia Intermediaries received approval from the Labuan Offshore Financial Services Authority (LOFSA) to establish a re-Takaful division – BMS Asia Re-Takaful – within its Kuala Lumpur office.
Takaful Ikhlas Selangor scheme
Takaful Ikhlas aimed to achieve a collection of US$496,149 (RM1.8 million) for its latest insurance scheme from Selangor state government staff by the end of 2006. Skim Komprehensif Takaful Selangor, a joint effort between Takaful Ikhlas and PNSB Insurance Broker, offered staff an insurance scheme where 50% of the payments were paid by government subsidy.
MNRB to offer re-Takaful products
MNRB Holdings was scheduled to offer re-Takaful products to its clients in early 2007, pending approval for a re-Takaful license from Bank Negara Malaysia.
MNRB posted a 75% growth in fourth quarter net profit over 2005, primarily due to higher investment income earned by Malaysian Reinsurance and higher Wakalah fees gained by Takaful arm, Takaful Ikhlas.
Takaful Malaysia Mudarabah
A collaborative Mudarabah founded in 1997 earned Takaful Malaysia US$797,801 (RM2.9 million) from unit trust companies.
Under the program, investors in participating unit trust companies would be entitled to Takaful Malaysia’s Group Family Takaful Plan.
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