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Asia’s first Islamic ETF launched: Malaysia launched Asia’s first Islamic exchange-traded fund as part of efforts to cut the country’s holding of listed equity and boost its bid to become a global Islamic financial hub.
The RM840 million (US$254.5 million) MyETF Dow Jones Islamic Market Malaysia Titans 25 provides exposure to 25 leading Shariah compliant companies listed on Bursa Malaysia such as plantations to energy group Sime Darby, DiGi, MISC, Gamuda and toll road operator PLUS Expressways. The fund is managed by i-VCAP Management.
Bank Islam selects Temenos: Bank Islam Malaysia reached a decision to implement the T24 modular core banking platform from Swiss vendor Temenos to provide Shariah compliant services to its customers at its branches and via the Internet.
Temenos said the bank was implementing a pre-configured version of its platform — T24 Model Bank — to replace a Silverlake core banking system and an Internet banking platform supplied by i-Flex at the bank.
T24 would support operations in 90 branches across Malaysia as well as online customers.
Bondholders take over Sunway: Sunway Infrastructure (SunInfra) shareholders agreed to its bondholders’ takeover of Sunway Holdings’ 36.16% stake in the company. The surrender of the stake was in exchange for the cancellation of Sunway’s RM50 million (US$15.27 million) undertaking in relation to SunInfra’s RM2.01 billion (US$614.15 million) Bai Bithaman Ajil Islamic debt securities.
The Islamic bonds were issued in 2001 to finance the construction of the Sistem Lingkaran Lebuhraya Kajang highway. However, the highway had had lower-than-projected traffic volume since its opening in 2004.
Binariang refinancing completed: Binariang GSM successfully refinanced the RM20 billion (US$6.12 billion) bridge loan for its buyout of Maxis Communications in June 2007. The bridge loan comprised RM12.05 billion (US$3.69 billion) nominal value of medium-term notes, RM300 million (US$91.87 million) nominal value of commercial papers (collectively the senior Sukuk Musharakah) and RM3.02 billion (US$924.92 million) nominal value of junior Sukuk Musharakah as well as a US$1.2 billion syndicated term loan facility.
BNM reserves up US$14 billion: The international reserves of Bank Negara Malaysia (BNM) amounted to RM335.7 billion (US$101.3 billion) as at the 31st December 2007. The reserves level took into account the quarterly adjustment of the foreign exchange revaluation loss, following the strengthening of the ringgit against the major currencies during the quarter, according to a statement from BNM.
For the year 2007 as a whole, BNM said the international reserves increased by RM45.3 billion, reflecting the strong fundamentals of the Malaysian economy, in particular the balance of payments position.
ARB to triple REIT assets: Amanah Raya announced it aimed to triple the size of its listed property trust AmanahRaya REIT to RM2 billion (US$612.42 million) this year, from RM641 million (US$196.27 million) as at December 2007.
Bursa Malaysia-DGCX derivatives pact: Bursa Malaysia signed an agreement with the Dubai Gold and Commodities Exchange (DGCX) to jointly develop the derivatives markets in Malaysia and the UAE.
INCEIF mandates new instruments: The International Center for Education in Islamic Finance (INCEIF) devised three new Islamic financial instruments and was also working on a new set of wakaf laws.
According to Professor Dr Murat Cizakca, a member of INCEIF’s professional development panel and joint director of research, the Sukuk and cash wakaf products were 100% Shariah compliant, coupled with the dynamics of western financial instruments.
MAAKL Shariah fund: MAAKL Mutual launched a regional fund, dubbed the MAAKL Shariah Asia-Pacific Fund. According to MAAKL, the new fund’s primary focus would be on Asia-Pacific investments, including China, Hong Kong, Indonesia, South Korea, Malaysia, the Philippines, Taiwan, Thailand and Australia.
Telekom Malaysia finalizes largest deal: Telekom Malaysia (TM) completed an Islamic sale and leaseback transaction involving the issuance of RM1 billion (US$303.51 million) asset backed Sukuk Ijarah by Menara ABS (MAB).
MARC buys stake in IIRA: Malaysian Rating Corporation (MARC) began negotiating the finalization of a 4% stake purchase in Bahrain’s Islamic International Rating Agency (IIRA) due in February.
CIMB looks beyond Southeast Asia: Badlisyah Abdul Ghani, CEO of CIMB Islamic, unveiled plans to expand private banking services to the Middle East and Asia, branching out of its wealth management business in Malaysia.
Such services would help CIMB compete against Citigroup and UBS, which are among personal-wealth managers competing for Middle Eastern clients with at least US$1 million of assets.
Saudi bank advising Malaysian IPO: Malaysia’s MMC Corporation appointed Saudi Investment Bank as adviser for the proposed initial public offering of the joint venture company developing the US$30 billion Jazan Economic City in Saudi Arabia. “We are working towards it (the exercise). I can’t tell you exactly when it is going to happen,” group CEO Feizal Ali told reporters.
MMC and Saudi Binladin Group each held a 50% stake in the company. The group planned to list the developer on the Saudi Stock Exchange to fund the development of the 30-year economic city project.
AFB increases stake in retail: Asian Finance Bank obtained approval from Bank Negara Malaysia for 33 new products to be launched progressively in the next few years. CEO Faisal Alshowaikh said these products would help the bank meet customers’ needs.
Largest Mideast facility for Al Rajhi: Al Rajhi Banking and Investment Corporation Malaysia (Al Rajhi Malaysia) became the sole financier for Saudi Telecom Company (STC)’s RM1.5 billion (US$450 million) 10-year financing facility. The ringgit-denominated facility was a structured commodity financing facility.
First OCBC Islamic unit approved: OCBC Bank (Malaysia) received approval from Bank Negara Malaysia to launch its maiden Islamic banking subsidiary, director/CEO Albert Yeoh confirmed. Declining to disclose details, Yeoh only commented, “The first branch will come out this year. We are very happy to say that we have indeed got the approval.”
Affin advises on education: Pendidikan Industri YS (PIYS) appointed Affin Investment Bank as principal adviser, lead arranger and primary subscriber for its issuance of RM150 million (US$45.52 million) Bai Bithaman Ajil Islamic debt securities (BaIDS).
TAKAFUL
MalaysianRe looks outside: Overseas business was expected to account for a fifth of Malaysian Reinsurance’s (Malaysian Re) revenue by the 31st March 2010.
This was following the company’s move to boost its physical presence in existing overseas markets that have historically outperformed its local operations.
Overseas business was at the time making up 13% of revenue in Malaysian Re, the main revenue source of its parent company MNRB Holdings, which also offered Takaful under Takaful Ikhlas.
According to sources, Malaysian Re’s foreign revenue rose 40% in the financial year to the 31st March 2006, and 50% in the first six months of fiscal 2007.
Great Eastern wants to go halal: Great Eastern Life Assurance Malaysia submitted an application for a Takaful license to Bank Negara Malaysia, after expressing interest in adding Takaful products to its suite of insurance plans.
The company attributed this to the relatively untapped Muslim market in terms of insurance.
Deputy CEO Koh Yaw Hui said the discussed modes of introduction included joint ventures with existing Takaful players.
New scheme for maids: Employers will have to insure their foreign maids under a new insurance scheme to be launched by the government. The annual RM75 (US$22) Takaful insurance coverage to be administered by a government-linked company would be for accidents, death and healthcare.
Home affairs minister Radzi Sheikh Ahmad said that the groundwork on the terms and conditions of the insurance scheme was ready.
Indonesian maids make up the bulk of the 370,000 domestic helpers in the country.
Malaysia entices Fitch: Fitch Ratings had expressed its interest in rating Malaysian Takaful issuers.
Jeffrey Liew, head of insurance for Fitch Ratings (Asia-Pacific), said Malaysia was at the forefront in the region with nine Takaful provider start-ups ripe for rating.
He was also confident that a rating by a recognized international rating company would render a company more attractive to foreign investors.
People over policies for Etiqa: The arrival of Etiqa significantly elevates the competitive nature of the Malaysian insurance and Takaful market.
The new brand was the result from the merger of the Maybank insurance and Takaful sector, Takaful Nasional and Malaysia National Insurance.
Lowe & Partners was appointed to the Etiqa business in August 2007 to help the Takaful company position itself as Etiqa’s management was determined to make the company more accessible and relevant to customers.
Drawn from the brand platform of “Humanizing Insurance & Takaful”, Etiqa was determined to provide a better experience, overall for its customers by making insurance and Takaful more accessible, more transparent and in a more simplified manner.
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