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CIMB, Daewoo Securities in strategic alliance: CIMB Investment Bank (CIMB) and South Korea’s Daewoo Securities (Daewoo) finalized a strategic partnership involving the collaboration of the two institutions on investment banking, stockbroking and asset management, said Nazir Razak, group CEO of CIMB Group.
Set for a 2008 launch, the two parties would explore and develop all areas of collaboration, including Islamic finance.
Tune Money Capital granted license: In line with Tune Money Capital’s licensing for its fund management business from Securities Commission Malaysia, the company stated the possibility of offering Shariah compliant products in its portfolio.
CEO Tengku Zafrul Aziz said the company was eager to participate in the unit trust industry as it is huge, amounting to RM169 billion (US$52 billion) in 2007.
EON Capital stake sold for US$415 million: Hong Kong-based Primus Pacific Partners confirmed its purchase of 20.2% of EON Capital at RM1.34 billion (US$415 million). The deal included EON Bank and EONCap Islamic, subsidiaries of EON Capital.
Primus’ buy followed its failed bid for RHB Capital in 2007, against financial bigwigs and government-backed Employees Provident Fund.
CIMB to arrange US$4 billion Sukuk: CIMB, one of the biggest deal-makers in Sukuk, expected to arrange as much as US$4 billion in Islamic bonds by the end of 2008, said Badlisyah Abdul Ghani, head of Islamic banking.
In 2007, CIMB accounted for nearly half of the local Islamic bond market and a fifth of global Sukuk issues.
BNM dialogue on MIFC with lawyers: Bank Negara Malaysia (BNM) invited lawyers to participate in a dialogue on the issue regarding the admission of foreign lawyers under the Malaysian International Islamic Financial Center (MIFC) initiative. The dialogue was chaired by the central bank governor, Dr Zeti Akhtar Aziz.
Issuance of Bon Simpanan Merdeka 2008: Bank Negara Malaysia (BNM) announced the issuance of Bon Simpanan Merdeka 2008 amounting to RM2 billion (US$618 million) on the 1st April 2008. The Shariah compliant bond was an additional savings instrument for senior citizens aged 55 and above and who were not employed on a full-time basis,
BNM said.
The minimum investment was RM1,000 (US$309) and the maximum was RM50,000 (US$15,437) per investor and could be subscribed at all commercial banks.
IDR development to commence: Construction on the Iskandar Development Region was officially announced. Now known as Iskandar Malaysia, the project is poised to be the region’s premier Islamic financial hub.
Shariah assets surge: Islamic banking assets in Malaysia at the end of 2007 stood at RM147 billion (US$46 million), accounting for 12.3% of the total banking assets in the country, said deputy finance minister Dr Ng Yen Yen. She also revealed that the size of the outstanding corporate Sukuk market was at RM150 billion (US$47 million) as at December,2007.
Maybank Islamic confident:Maybank Islamic, the latest stand-alone Islamic bank in Malaysia, expected to rake in some RM200 million (US$62.25 million) within a year from its new product, the Islamic Foreign Currency Account (FCA-i).
Limitless JV to develop world halal center: Dubai World unit Limitless, in a joint venture with Mihap Holdings and Selangor Agricultural Development Corporation (SADC), was developing a fully integrated world halal center in Selangor to turn Malaysia into a global gateway for the industry.
The Malaysia International Halal Park (MIHAP), an 80:20 joint venture between Limitless and a Malaysian investment company comprising Mihap Holdings and SADC, will include more than 800 hectares of residential units, food manufacturing plants and logistics ports.
The facility will also accommodate training and research centers as well as offices and retail facilities. Work on MIHAP would start toward the end of 2008, with completion phased over eight years.
And the best banker of 2007 is…: In the tough battle for Islamic Finance news’ most coveted title of Best Individual Islamic Banker, Badlisyah Abdul Ghani showed he was a cut above the rest. The CEO of CIMB Islamic Bank was the favorite, and had been involved in more than US$10 billion Islamic financial deals locally and globally.
A close second was Afaq Khan, CEO of Standard Chartered Saadiq, while third place went to Salman Younis, managing director of Kuwait Finance House Malaysia.
Shariah compliant energy fund: Sarawak Energy signed a memorandum of understanding with a consortium of banks to carry out a study on the energy fund structure for Sarawak Energy’s projects, excluding the Murum hydroelectric project, in a three-month period. The consortium comprised RHB Islamic Bank, Unicorn International Islamic Bank Malaysia, Asian Finance Bank (AFB) and Kuwait Finance House Malaysia.
Malaysian banks safe from crisis: None of Malaysia’s Islamic banks were hit by write-downs resulting from the US subprime crisis, second finance minister Nor Mohamed Yakcop said on the 4th February. He added that the resulting global credit crunch had spurred greater interest in Shariah compliant financing.
HSBC, Deutsche Bank optimistic: HSBC Malaysia and Deutsche Bank received approval to set up dedicated Islamic banking subsidiaries and were optimistic about the potential for expansion of their Islamic banking branches in Southeast Asia.
Westports to issue Sukuk: Westports Malaysia proposed RM800 million (US$248.37 million) in Sukuk Musharakah via medium-term notes. The tenure of the Sukuk was slated for 15 years, and was rated AA+IS by Malaysian Rating Corporation (MARC).
AFB seeks foothold in Islamic finance: Asian Finance Bank (AFB), which was on an aggressive expansion program, believed it was in a strong position to further penetrate the growing local Islamic finance market, said CEO Faisal Alshowaikh.
Bank Negara rolls out training program: The central bank of Malaysia successfully rolled out its Financial Sector Talent Enrichment Program (FSTEP), following the selection of the first batch of 297 candidates out of 2,900 applicants. In their inaugural engagement session, participants had the opportunity to discuss the role of Bank Negara Malaysia in macroeconomic management with its governor Dr Zeti Akhtar Aziz and current issues including developments in the international financial system.
Finance training for Shenyang: The Islamic Banking and Finance Institute Malaysia (IBFIM) was to help Shenyang Province Authority form an Islamic financial community on a 120-hectare site in the Chinese region.
TAKAFUL
CMS-I provides solutions to HLTMT: CMS I-Systems was appointed technology solutions provider to Hong Leong Tokio Marine Takaful (HLTMT).
Dubbed “InsureConnect”, CMS I-Systems’ solution aimed to serve as HLTMT’s Intermediaries Portal System. It was designed to service its entire distribution channel of agents, financial executives of Hong Leong Bank and independent financial planners.
Takaful industry to see high growth: The Takaful industry was expected to record high growth this year amid growing competition in the market, said Malaysian Takaful Association chairman Mohd Tarmidzi Ahmad Nordin.
He said the premium would continue to grow by as much as RM600 million to RM3 billion (US$186.3 million to US$931.3 million), compared with RM2.4 billion (US$745 million) in 2007.
Takaful Re posts US$11.6 million profits: Takaful Re Limited (TRL) registered net profits of US$11.6 million for the 2007 financial year compared to US$1.3 million in 2006, said Khalid Al Bustani, chairman of Takaful Re.
From the second year of operation, TRL’s board of directors has recommended a cash dividend of 5% on the company’s paid-up capital (US$0.05 per share).
Gross contributions increased by 35% to US$20.34 million in 2007 from US$15.05 million in 2006. The total investment earnings increased in 2007 to US$11.8 million.
The average rate of return on investments was 9.1% despite the volatility of the regional markets. Shareholders’ equity stood at US$138.2 million and the book value per share was US$1.11 at the end of December 2007.
Anti-sleep device for insurers: Smart Synergy Ventures (SSV), which introduced the first safety product under its stable that uses German-French technology, “Smart Alert”, expected to sell 500,000 units of the product to Takaful and insurance companies by end-2008, said SSV managing director, Aznain Abdullah.
The product, a personal safety device that can be used while driving, prevents drivers from nodding off.
It works on the principle of electronic balance that has been created to either set off an alarm or vibrate if a motorist becomes sleepy while driving to prevent road accidents.
The device resembles a bluetooth head-set and is expected to enjoy good response with its reasonable pricing and ease of use.
Shariah products help Prudential: While Prudential was looking at ways to expand the group’s range of Takaful products, it was also seeking untapped markets with scope for rapid growth.
CEO of Prudential Corporation Asia Barry Stowe identified Egypt as one such market. He is also keen to build on the Pru experience in Indonesia, where 25% of all sales in the fourth quarter of 2007 were derived from Shariah compliant products.
Half of the sales involved non-Muslim customers, he said, adding that consumers are attracted to the simplicity of the products and their ethical stance to investment.
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