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Cagamas’ Sukuk launched: Cagamas launched RM2.02 billion (US$605 million) in Islamic medium-term notes (MTN). The Commodity Murabahah Sukuk, said to be the largest issuance in Malaysia so far this year, would be available in nine tranches, with tenures ranging from one to 20 years.
Cagamas utilized palm oil as the underlying commodity asset in the Sukuk, marking a departure from commodities traded on the London Metal Exchange which are typically used and introduced an acceptable asset alternative to the markets, said the national mortgage corporation.
New CIMB fund to raise RM200 million: CIMB Islamic Bank revealed plans to raise RM200 million (US$60 million) from Market Select, a Shariah compliant capital-protected fund to be invested in 17 developed and emerging markets worldwide. It aimed to capture the upside of each market while moderating the risks arising from them, said CEO Badlisyah Abdul Ghani.
MDV to issue Sukuk, says report: Malaysia Debt Ventures (MDV) began planning its first Shariah compliant medium-term notes of up to RM1.5 billion (US$435 million) to fund its Islamic financing activities, said a report. The government-guaranteed Sukuk would be Murabahah-structured, and with tenors of up to 15 years.
Al-Aqar announces first-half results: Al-Aqar KPJ Real Estate Investment Trust (REIT), managed by Damansara REIT Managers, recorded a 27% increase in revenue for the first half of 2008 to RM22.75 million (US$7 million) from RM17.85 million (US$5.3 million) in the same period of 2007, said Yusaini Sidek, CEO of Damansara REIT Managers. Net income also went up to RM14.43 million (US$4.3 million) compared with RM12.37 million (US$4 million) previously, reporting a 16.6% increase, he added.
Labuan IBFC plans expansion: Islamic finance intermediary Labuan IBFC (International Business and Financial Center) announced plans to set up in Asia and the Middle East within the following 12 months.
Bank Islam partners TH Properties: Bank Islam and TH Properties teamed up on a loan package which included up to 100% financing and a “payment upon completion” scheme for homebuyers of the developer’s Bandar Enstek project. Buyers could buy a house without paying anything until the house was ready to be occupied.
StanChart to launch Saadiq soon: Standard Chartered (StanChart) was confident of starting up its full-fledged Islamic banking unit in Malaysia by the end of 2008.
StanChart Saadiq would offer products and services including consumer and corporate finance as well as treasury operations. Its parent, Standard Chartered, was the first foreign bank to offer an Islamic banking window in Malaysia in 1993.
IDB launches first ringgit Sukuk: The Islamic Development Bank (IDB) launched its first ringgit-denominated Sukuk with the signing of program documents worth RM1 billion (US$306.28 million). The funds raised from the Islamic bonds would be used to finance projects in Malaysia.
Closer to liberalization: Malaysia inched a step closer to allowing foreign law firms into the country with the local Bar Council proposing to liberalize its rules and allow joint ventures (JVs). The government was said to be keen on overhauling its existing system as it bids to promote Malaysia as a hub for Islamic finance work.
Eversheds was currently the only UK law firm with a presence in the country as the firm has had a strategic alliance with Kuala Lumpur-based law firm, Shahrizat Rashid & Lee, since December 2004. The firm was already discussing the potential of a JV with its alliance partner if the rules were changed.
Unit holders approve Axis REIT’s conversion: Unit holders approved the reclassification of Axis Real Estate Investment Trust (Axis REIT) from a conventional REIT to an Islamic one, said Stewart LaBrooy, executive director and CEO of Axis REIT Managers.
CMH project may get positive response: The Commodity Murabahah House (CMH) project, a spot commodity market that would use crude palm oil as its underlying commodity to facilitate Islamic financing based on the Murabahah concept, was projected to be launched by the first quarter of 2009.
HWANGDBS IM declares distribution: HWANGDBS Investment Management declared the annual income distribution of its Fahim and Izdihar funds at RM0.04 (US$0.011) and RM0.05 (US$0.014) respectively.
Fahim is an Islamic growth and income type fund while Izdihar is an Islamic growth type fund. The distributions were for the financial year ended the 31st August.
The gross income distribution for Fahim was its third and final distribution since its launch on the 28th June 2004, while for Izdihar, this was its sixth and final distribution since being launched in October 2002.
RBS Islamic unit in the offing: The Royal Bank of Scotland (formerly ABN AMRO Bank) began planning an Islamic subsidiary to tap into the rapid growth of Islamic banks in Malaysia. RBS had already secured the approval of Bank Negara Malaysia to undertake Islamic banking products via an Islamic window.
CIMB is possible major shareholder: CIMB Group could own up to 81.3% of the merged Bank Lippo and Bank Niaga if all minority shareholders decided to opt for the stand-by offer from the Malaysian group.
CIMB revealed its preference of using cash over a share-swap into the new Bank CIMB Niaga.
Malakoff’s Sukuk ‘badly affected’: Only three of 13 bonds issued by the independent power producers (IPPs) in Malaysia would face a major negative impact from the windfall tax imposed on their profits, according to an analysis by AmResearch.
It said that one of the three was Malakoff’s senior Sukuk whose funding model would be under pressure, with debt restructuring for the Islamic bond being very likely.
Al Rajhi to distribute Namaa’ fund: Al Rajhi Bank (Malaysia) said it would exclusively distribute Namaa’ Asia-Pacific Equity Growth, Malaysia’s first feeder fund to invest primarily in Asia-Pacific equities.
Al-Hadharah REIT to acquire estates: Shariah compliant Al-Hadharah Boustead Real Estate Investment Trust (REIT) expressed interest to purchase the Bebar and Malakoff estates for RM192 million (US$58.4 million), with plans to increase its plantation size from 12,000 hectares to 16,000 hectares.
Cross-border endeavor: Singapore-based City Developments Limited (CDL) appointed CIMB-GK Securities, a wholly owned subsidiary of CIMB Group, as lead arranger of its proposed S$1 billion (RM2.41 billion, or US$697 million) unsecured Islamic multi-currency medium-term notes (Islamic MTN) program.
CDL, the property arm of Hong Leong Group Singapore, also appointed CIMB-GK as dealer and lead manager of the first issuance of Sukuk Ijarah.
TAKAFUL
Takaful Malaysia declares payment: Takaful Malaysia declared a 10% Mudarabah payment for participants of its general Takaful products. Holders of policies that expired after March 2007 were entitled to 10% of their net contribution provided no claims had been made against the policies and all payments of contribution had been paid in full for the year concerned.
PIDM issues regulations: The Malaysia Deposit Insurance Corporation (PIDM) issued regulations on terms and conditions of membership following extensive consultations with Bank Negara Malaysia, the banking industry and related parties.
One of the requirements is that member banks, while maintaining an adequate level of capital and liquid assets as required by the central bank, also need to have appropriate, effective and prudent risk management policies, procedures and control.
According to PIDM CEO Jean Pierre Sabourin, the regulations are intended to promote the exchange of timely and relevant information. For example, member banks need to report any event that can be considered as unusual in the course of its business within seven days. Banks are also required to maintain appropriate records.
Etiqa launches BizPac: Etiqa launched BizPac, a financial solution for small and medium-sized enterprises (SMEs) in the manufacturing industry, on the 8th August 2008. It was designed to help business owners manage their business and protect them from unfortunate events.
Maybank cancels insurance acquisition: Malayan Banking (Maybank) canceled plans to team up with Indonesia’s Panin Life to venture into the Takaful and insurance market in the republic. The approval given by the Indonesian ministry of finance for the partnership had lapsed since the 4th August.
Maybank had earlier entered into a memorandum of understanding with Panin to acquire a 60% stake in Anugrah Life Insurance. In the statement, the bank said that both parties had been unable to formalize the proposed partnership due to unavoidable circumstances. It had already notified Panin and Anugrah that all arrangements relating to the acquisition were to be terminated.
Maybank launches Al-Waqi: Maybank launched Takaful Al-Waqi, a RM200 million (US$58 million) short-term single premium investment-linked Islamic commodities fund developed by Etiqa Takaful. Several sectors such as energy, industrial metals, precious metals and agriculture would benefit from Takaful Al-Waqi.
PruBSN’s latest for women only: Prudential BSN Takaful launched the Takaful Puteri rider, which is specially designed for women and offers protection against the financial impact of expensive treatment.
Among the benefits in Takaful Puteri is the Lady Care Benefit, which covers illnesses and specified treatments such as skin grafting due to skin cancer and burns and facial reconstructive surgery due to accidents. Takaful Puteri Plus covers pregnancy complications and infant congenital illnesses.
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