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Islamic funds rank high for Public Mutual: Public Bank’s wholly owned subsidiary, Public Mutual, declared distributions for nine of its funds, with its Islamic funds at par with the conventional funds at 4.25 sen (1.24 US cents) for its Islamic Bond Fund, three sen (0.85 US cents) for its Islamic Cash Management Fund, and two sen (0.58 US cents) apiece for its Islamic Money Market and Asia Equity Funds.
The largest private unit trust company in Malaysia, Public Mutual manages 62 funds for more than 1.8 million accountholders. As at the 30th May 2008, the total fund size managed by the company was RM28.4 billion (US$8.74 billion).
Cagamas forays into Islamic guarantees: The newly formed Cagamas HKMC, a joint venture between Cagamas Holdings and the Hong Kong Mortgage Corporation (HKMC) launched its first product, a Mortgage Guarantee Program (MGP), available in both conventional and Islamic forms.
The product served to provide financial institutions, specifically mortgage originators, a mortgage guarantee facility offering portfolio and risk management solutions to manage the credit risk exposure of their mortgage portfolios. The product would also provide affordable mortgage loans to homebuyers. Executive director of Cagamas, Steven Choy, affirmed: “Our MGP is the first Islamic guarantee in the world, and sets a new industry standard.”
New Islamic financial products: Export-Import Bank of Malaysia (EXIM Bank) was expected to roll out its Islamic financial services products in early 2009. Targeting specific sectors and customers, these would include Takaful services.
The move was part of the bank’s strategy to add depth and breadth to its activities. Other measures included upgrading its information technology infrastructure to increase efficiency and a corporate improvement program for a better overall delivery system.
Zico establishes presence: Shortly after the launch of its affiliate ZI Shariah Advisory in June, law firm Zaid Ibrahim & Co (Zico) established its presence in Vietnam and Dubai. Zico’s Vietnamese foray was in conjunction with Allen & Gledhill Singapore, and was the first joint venture (JV) law firm of its kind to be licensed in the country. Dubbed “AGZI LCT”, the JV has offices in Ho Chi Minh City and Hanoi.
Zico was also the first Asian law firm to have the approval of the Dubai Financial Services Authority to provide services to local, regional and international clients in and from the Dubai International Financial Center.
SC takes initiatives to improve ICM: Securities Commission Malaysia planned to publish a six-book series on the country’s Islamic capital market (ICM). Slated to be out in 2009, the books were designed to be comprehensive and practical sources of reference and would cover Sukuk, equities, structured products, risk management, derivative products and regulatory framework.
Al Rajhi launches promotion: Al Rajhi Bank launched its Room Service promotion, allowing customers to apply for personal loans from the comfort of their homes. A bank representative would meet the applicants at home or in the office to complete the procedure. The bank’s head of retail, Sabry Ghouse, said the promotion held a profit rate of 7.99%.
Malaysian Sukuk on global pricing index: In a tie-up between international news agency Thomson Reuters and local bond pricing agency Bondweb Malaysia, Islamic fixed income content would be at the core of evaluated prices for Malaysia’s Islamic and conventional bonds to be provided to investors. Although Malaysia is the world’s biggest Sukuk issuer, only 1% of the bonds was being traded on a daily basis, said Bondweb Malaysia’s chief operating officer, Meor Amri Meor Ayob.
Thomson Reuters Malaysia managing director Simon Soo Hu said although its service provided conventional bond data, the agreement also tried to harmonize the different Islamic bond sectors across the globe. He noted that Islamic finance was set to grow because more financial institutions were offering Islamic finance services while the number of funds available to the investors was also on the rise and Islamic countries were showing phenomenal financial growth opportunities.
KFH seals private placement: Kuwait Finance House (KFH) sealed a private placement via its Al-Nebras 2 fund, which catered to VIP clients, to finance a massive urban development project in the Iskandar Malaysia hub in Malaysia’s Johor state. VIP department manager Talal Al-Nesf said the city by the seaside offered many investment opportunities.
The VIP department, according to him, had a specialized team to serve clients effectively, privately and accurately to meet their banking, financial and investment requirements. It also provided technical support such as advisory services regarding global markets, currencies, investment funds and shares.
Scholarship in Shariah finance: Bank Negara Malaysia has begun offering scholarships in Shariah finance in line with its commitment to strengthen the Islamic financial services industry. The scholarship award was part of the fund for Shariah scholars in Islamic finance which was established to enhance knowledge, research, talent and intellectual discourse in Shariah.
RHB launches Islamic fund: RHB Investment Management launched a Shariah compliant money market product, the RHB Islamic Cash Management Fund (RHBICMF), with an approved size of 500 million units priced at RM1 each (US$0.31).
Islamic money market instruments and deposits would receive 90% of its investments with financial institutions with less than one year maturity, while the remaining 10% was to be invested in financial institutions whose products had between one and two years’ maturity.
OK for Islamic fund management firms: CIMB-Principal Asset Management, Kuwait Finance House (Malaysia) and DBS Asset Management won approval to establish Islamic fund management companies. This action was among several government measures to strengthen Malaysia’s position as an international Islamic financial center.
Also in the pipeline was the establishment of Islamic stockbroking subsidiaries.
Al Rajhi enters first property deal: Al Rajhi Bank (Malaysia) inked an agreement with i-Citya to buy 36 units of i-City Cybercentre 1 office suites for RM95 million (US$29 million).
The transaction marked the bank’s first property venture in Malaysia.
DutaLand secures Islamic financing: DutaLand’s 100%-owned KH Land secured Islamic financing of RM85 million (US$26 million) from Asian Finance Bank to build 49 units of four-storey villas in a gated housing development in Kuala Lumpur.
Principal partners CIMB: Principal Financial Group and CIMB Group launched CIMB-Principal Islamic Asset Management, their signature global Islamic asset management company based at the Malaysia International Islamic Financial Center (MIFC).
TAKAFUL
Maybank to buy into Takaful firm: Maybank received the green light from Bank Negara Malaysia for its plan to buy 30% of Pak-Kuwait Family Takaful in Pakistan. The central bank approved the bank’s application to set up or acquire a subsidiary as a special purpose vehicle for the acquisition.
Pak-Kuwait Family Takaful is a joint venture between Pak-Kuwait Investment, Allied Bank and Saudi Pak Industrial and Agricultural Investment.
The company, which had PKR500 million (US$7.2 million) in issued and paid-up capital, was in the process of applying for a license from the Pakistani authorities to operate the family Takaful business, said Maybank.
MNI to be known as Etiqa Insurance: Malaysia National Insurance (MNI) based in Brunei was rebranded as Etiqa Insurance as a result of the merger of Mayban Fortis Holdings, MNI and Takaful National (now known as Etiqa Takaful) in 2005.
Following the merger, Etiqa Insurance and Takaful became the second-largest insurance group in Malaysia with assets of RM17.83 billion (US$5.09 billion) and shareholders’ funds totaling RM1.82 billion (US$521.41 million) at the end of financial year 2006/07.
Ministry to start Takaful scheme: Information minister Ahmad Shabery Cheek revealed plans by the ministry to introduce a Takaful funeral scheme to its 10,000 employees. Under the plan, a deceased’s family would receive RM500 (US$153) for funeral expenses as well as RM3,000 (US$916) in cash assistance.
AmIslamic launches Islamic plan: AmIslamic Bank launched its first Islamic investment-linked plan. CEO Ahmad Zaini Othman said AmIslamic was targeting to distribute up to 11,000 subscription certificates worth more than RM40 million (US$12.22 million) under the scheme.
Manulife keen to set up Takaful unit: Manulife Insurance expressed its interest to venture into the Takaful sector. President and CEO Peter D Robertson said: “Our board of directors is interested in a Takaful subsidiary, maybe a few years down the road, although at the moment Bank Negara Malaysia is not issuing any new licenses.”
As at June, the central bank of Malaysia had issued only eight Takaful licenses, including four to local-foreign groups to establish Islamic insurance services in the country.
Etiqa targets 20,000 policies: Etiqa Insurance revealed a target of 20,000 policies for its latest traditional family Takaful medical plan, the Etiqa Takaful Medic-Save Rider, for 2009.
The plan provides coverage of 90% of medical and hospitalization bills and comes with a medical card for hassle-free admission to panel hospitals, he added.
The company’s strategy also involved focusing on cyber communities to grow its local Takaful penetration, be it consumers or agents. Vice-president Izzudin Shah Othman said Etiqa was working with the energy, water and communications ministry to establish a community center in cyberspace to educate the public on Takaful products.
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