Wednesday, 25 May 2016

Event Summary (KLCIF2016) - KL Conference on Islamic Finance 2016


KL Conference on Islamic Finance 2016


Date    : 30-31 May 2016
Venue : Grand Seasons Hotel, Kuala Lumpur - Malaysia

“An international gathering of practitioners, scholars and experts to discuss and share their knowledge, expertise and experience on the principles, instruments and issues related to Islamic finance, to be held at the world’s leading Islamic financial centre…Kuala Lumpur.”


Event site : www.islamic-finance-conference.net

KEY FOCUS/TOPICS:
- Product development and Implementation of Islamic financial products
- Ensuring Shariah compliance in Islamic financial instruments
- Sukuk: development, issues and challenges
- Islamic gold account: a golden opportunity
- Islamic mutual funds (unit trusts): factors to consider in making an investment
- The rise of Islamic wealth management in Islamic finance industry
- Islamic financial planning: success in both worlds
- Takaful: innovation and solutions
- Enterprise risk management for Islamic banks
- Enterprise risk management for takaful operators
- Accounting and auditing
- Human capital development in Islamic finance industry
- Legal issues and challenges in Islamic finance
- Dispute settlement in Islamic finance: issue and solutions
Islamic ethics in financial services industry
- Corporate governance for Islamic finance industry


SPEAKERS:

Speakers are selected from Islamic banks, takaful operators, academicians, legal practitioners, consultants, regulatory bodies.

Among the speakers are:


WHO SHOULD  ATTEND:
- Islamic bankers/bankers
- Takaful/insurance operators
- Regulators
- Head of governmental departments
- Financial planners/wealth advisors
- Financial consultants
- Legal practitioners (lawyers)
- Academicians (lecturers)
- Entrepreneurs (businessmen/importers/exporters etc)
- Other professionals 

REGISTRATION:
Early Bird Fee: 
Registration with payment by 18 May 2016
Malaysian   :  RM1,500
International  :  USD600

Normal Fee:
Registration with payment after 18 May 2016
Malaysian  :  RM1,800
International  :  USD700
Special fee for Malaysian university lecturers :  RM1,000 (group discount not applicable)

Fee is inclusive of lunch, refreshments and seminar package only.


Group Discount:
Enjoy 10% discount for 3 or more delegates registered from the same organisation and the same billing source.


DOWNLOAD BROCHURE
(will be uploaded soon...for now you may request for tentative program or you will be given a tentative program when register online)

 Download the brochure

REGISTER ONLINE



ORGANISER


VENUE


Grand Seasons Hotel, Kuala Lumpur - Malaysia

MEDIA PARTNERS


Kuala Lumpur


DP World Raises $1.2 Billion From Sukuk to Fund Bond Buyback

DP World Ltd., the Dubai-owned company that operates ports from China to South America, raised $1.2 billion from the sale of Islamic bonds and said a tender offer to buy back securities received 48 percent more bids than the target.
The company sold a seven-year sukuk that will be priced to yield 237.5 basis points, or 2.375 percentage points, over the benchmark midswap rate, according to two people familiar with the deal, who asked not to be identified because the information is not public yet. The issue received more than $2.5 billion in bids, they said.
Money raised from the sale was meant to fund an offer to buy up to $750 million of DP World’s existing 2017 sukuk and for general corporate purposes, the company said earlier this month. The tender offer received $1.113 billion of valid certificates at its close on May 23 and DP World said it may buy all of them if it raises enough cash from the issue.
The offer for the 2017 securities was to pay $10,555 for every $10,000 of principal.
Bond sales from the six-nation Gulf Cooperation Council, which includes the two biggest Arab economies of Saudi Arabia and the United Arab Emirates, are accelerating as governments and companies seek funds following oil’s decline in the past two years. Offerings from the region have risen 28 percent to $16.7 billion, while Qatar’s government, Abu Dhabi’s Etihad Airways PJSC and its partners also plan to sell bonds this week. Dubai-based Noor Bank PJSC also raised $500 million from a perpetual sukuk today.

Citigroup Inc., Deutsche Bank AG, Dubai Islamic Bank PJSC, HSBC Holdings Plc, Barclays Plc, Emirates NBD Capital PJSC, First Gulf Bank PJSC, JPMorgan Chase & Co., National Bank of Abu Dhabi PJSC and Societe Generale SA are helping arrange DP World’s issue. Noor Bank, Samba Financial Group and Union National Bank PJSC have also been appointed co-arrangers.

(Bloomberg / 24 May 2016)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Tuesday, 17 May 2016

Sukuk plays important infrastructure development role

Sukuk has played a significant role in promoting resilient infrastructure and sustainable economic development, and therefore should be boosted in the future, Finance Minister Bambang Brodjonegoro has said.
In his opening remarks at a seminar during the Islamic Development Bank ( IDB ) Group annual meeting at the Jakarta Convention Center ( JCC ) on Monday, Bambang said it was important for Islamic finance to contribute to the sustainable development goals ( SDGs ).
"Sukuk naturally controls the needs of financing, which are based on underlying assets. It also provides a protective mechanism and natural hedging, making the industry more sustainable," Bambang said.
He further said that sukuk had played a significant role in infrastructure financing. Aside from issuing sukuk for general financing, the government has issued sukuk to finance infrastructure projects, such as railways and toll roads.
"This kind of project financing assures the effectiveness of sukuk," he went on.
Bank Indonesia ( BI ) Governor Agus Martowardojo added that sukuk had been growing rapidly in the last few years. However, Islamic financing instruments must be developed.
Indonesia has been active in sukuk markets since it laid the groundwork for sukuk issuance in 2007. This year, Rp 110.9 trillion ( US$ 8.33 billion ) in sukuk was issued in the domestic and international markets, according to ministry data.

Sukuk made up 15 percent of total outstanding government securities as of April 29. It comprises six instruments across a wide range of tenors, sizes, coupons and investors. 

(The Jakarta Post / 16 May 2016)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Islamic finance prepares rules for awqaf and zakat charitable funds

Islamic finance institutions will present a set of guidelines for Muslim charitable institutions later this month, as the industry looks to develop a more efficient use of their assets, an Indonesian central bank official told Reuters.
Islamic endowments (awqaf) and alms-giving (zakat) have been in existence for centuries and hold billions of dollars in assets around the globe, but they are often criticised for being poorly managed.
A set of guiding core principles for zakat has now been completed and will be unveiled at an upcoming United Nations summit in Istanbul, said Indonesian central bank deputy governor Perry Warjiyo.
Similar rules for awqaf are also in development, Warjiyo said on the sidelines of the annual meeting of the Islamic Development Bank Group being held in Jakarta.
Indonesia’s central bank is hosting some of the technical discussions for developing the core principles, as it hopes to strengthen the auditing function and professional management of such entities.
Reliable statistics are scarce, but awqaf are believed to hold large portfolios of real estate, commercial enterprises, cash, equities and other assets, with some estimates as high as $1 trillion worth of assets held globally.

In Indonesia alone, registered land from awqaf stands at 1,400 square kilometres with an estimated market value of around $60 billion, according to the country’s Ministry of Finance.

(Reuters / 16 May 2016)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Monday, 16 May 2016

Bahrain Said to Raise $435 Million From Privately Placed Sukuk

Bahrain, whose junk rating was lowered by Moody’s Investors Service, tapped the dollar bond market for a second time in three months, according to two people familiar with the matter.
The Gulf nation appointed Noor Bank, Bank ABC and Kuwait Finance House to arrange a $435 million, privately placed Islamic offering, the people said, asking not to be identified because the information is private. The three-year debt will have a profit rate of 325 basis points over midswaps. Moody’s on Saturday reduced Bahrain’s long-term rating one notch to Ba2, two levels below investment grade.
The island state is attempting to shore up state finances pressured by low oil prices. Bahrain’s vulnerability to a decline in crude increased since 2009 when government expenditures started to rise in response to the global economic slowdown and civil unrest in the country. The sovereign last tapped the dollar bond market in February when it raised $600 million, a week after S&P Global Ratings cut the nation’s credit grade to junk.

Spokesmen for Bahrain’s central bank, Kuwait Finance House and Bank ABC didn’t immediately respond to calls or e-mails. No one at Noor Bank was immediately available for comment.

(Bloomberg / 15 May 2016)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Gold may fuel Islamic finance

With the Islamic finance industry set to be worth US$3 trillion in the next decade, gold could be a catalyst for its growth with the setting of new regulations that will allow Islamic investors for access to gold-based products for the first time.
The market development body, the World Gold Council (WGC), which is based in London and the Islamic standard setting body, the Accounting and Auditing Organisation for Islamic Financial Institutions (Aaoifi), based in Bahrain, are working on a draft of the standard that would galvanise the $2n Islamic finance industry.
“Consumers more or less have been confined to investing in bars and coins because that’s the only area where the rules are clear," says Natalie Dempster, the WGC’s managing director of central banks and public policy.
“It [the standard] could fundamentally change the way in which Islamic countries access gold."
A final draft is expected to be published in the next few months, to be followed by a period of public consultation, says Ms Dempster. The standard could be issued in the fourth quarter, prompting its adoption and unleashing hundreds of tonnes of extra demand for gold, she adds.
“This is the most significant game-changer for the gold market since the Washington Agreement in 1999, whereby 15 central banks pledged to coordinate and limit their activities," says Matthew Keen, the founder of the Dubai consultancy Evidens. “The price of gold has quadrupled since that agreement was formed."
The Washington agreement limited the amount of gold that several major European central banks can collectively sell in any one year, helping to stabilise the gold market. The price of gold in 1999 was $290.25 an ounce. Now it is trading above $1,266 an ounce.
“I would expect billions of USD equivalent to be made available towards the global gold markets, keeping in mind that gold as an asset class has, anyway, a strong presence in a near zero interest rate environment," says Gerhard Schubert, the founder of Dubai’s Schubert Commodities Consultancy.
The fact that the Aaoifi is working on the standard will speed up its adoption worldwide because the regulations issued by the body are widely accepted, analysts say.
The divisive view of gold as a commodity or currency will also be clarified in the standard, which will take into consideration both aspects of the metal.
“Gold can only be bought and sold on spot/cash basis, there can be no deferred payment for any purchase of gold, and there are specific rules on the use of gold as a commodity or currency," says Megat Hizaini Hassan, the head of Islamic Finance Practice at Lee Hishammuddin Allen & Gledhill in Kuala Lumpur.
“Thus having a Sharia standard on gold would help contracting parties to know what specifically they can or cannot do with gold."
Gold has had a lustrous start to the year, rising by about 20 per cent year to date on the back of the low interest rate environment and flight of investments to a haven asset.
Gold’s rally this year follows three consecutive years of losses, its longest rout in more than 30 years.
Demand for gold rose in the fourth quarter of last year 4 per cent to 1,117.7 tonnes, led by central bank purchases, the WGC says. Central banks are buying the bullion to diversify their asset portfolios amid wobbly global economic growth and plunging commodity prices.
For the full year, gold demand fell 14 tonnes to 4,212.2 tonnes, a level on par with demand for 2010, the WGC adds.
Although Islamic investors have missed the gold train, the new standard will help them channel their money into products such ad gold exchange traded funds (ETFs), gold accumulation accounts and gold savings accounts, analysts and officials say.

ETFs are funds that are listed on an exchange, tracking indices and behaving like stocks.
“[The standard] makes it easier and more cost efficient for banks and financial institutions to issue gold products," says Ms Dempster.
“At the moment, if you want to invest in Sharia-compliant assets, the universe of assets that you have to choose from is actually quite small."
Currently most Islamic investors funnel their money into equities, property and sukuk or Islamic bonds.
“Although the price of gold can prove to be volatile in the short term, it’s always maintained its value over the long term," says Samina Akram, the managing director of London’s Samak Ethical Finance. “Investing in physical gold or mining stocks, I feel, will prove popular for investors in coming years. I would even argue further, values of currencies are declining as fiat money has no intrinsic value, and physical gold could be one of possible remedies to the global financial crises."
Gold could be used as an underlying asset for a number of products, including sukuk.
Islamic banks could also use gold as a high-quality liquid asset (hqlas) to comply with more stringent Basel III banking standards that are being phased in. High-quality liquid assets can be composed of cash, or assets that can be converted into cash at little or no loss of value in private markets to meet a bank’s liquidity needs.
“Since the financial crisis, banks have been required to set aside pockets of so-called high-quality liquid assets to protect them against another systemic liquidity crisis," says Ms Dempster.
“Basel gave national supervisors in Islamic jurisdictions the right to define high-quality liquid assets themselves. And I think gold will fit very well there. It is an extremely liquid market."
But the adoption of the standard could face a few bumps.
Banks should be willing to adopt the standard and dedicate time and effort to create products that investors want.
“The Islamic community will only be able to take advantage of this if the banks, both Islamic banks and regular banks, are prepared to deliver products to their clients, Islamic or otherwise," says Mr Keen.
“If the banks don’t do anything to take advantage of this, then nothing changes.

(The National Business / 15 May 2016)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Saturday, 14 May 2016

Malaysia: Sukuk market holds potential,but devoid of retail players

KUALA LUMPUR: The sukuk market has a lot of potential as an asset class, but is currently dominated by institutional investors with little opportunities for retail players, a forum was told yesterday.
OCBC’s consumer financial services chief Lim Wyson said sukuk provides predictability of yields, which is especially looked for by investors in a volatile market.
“It is not so volatile compared to equities,” he said at a talk on Islamic wealth management at the Global Islamic Finance Forum 5.0.
Lim stressed, however, that the “depth and width” of the sukuk market need to be developed.
“If you are able to widen and deepen the sukuk issuance, you can tap into the private wealth management part of the business,” he said.
Speaking to reporters later, Lim said most of the time, institutional investors are the first to buy during a sukuk issuance. 
“Then there is left very little for the retail side. So one of the areas [to look into] is bigger development in terms of the number of issuance, liquidity so that retail investors have access to it,” he added.
Lim said the creations of more unit trusts with sukuk-investor type of funds will provide access for investors to participate in sukuk through a unit trust format.
“This is relating to investment mandates. Most of the syariah invested funds here are very concentrated in Malaysia or have a big allocation in Malaysia.
“What we are trying to find is more globally invested type of unit trust that is syariah-tied, that we will be able to give to our clients.
“That is the opportunity that we see, if we have more globally diversified mandates that are not so biased in terms of the heavyweight allocation to Malaysia. That is a demand seen in the market,” he added.
According to RAM Rating Services Bhd, global sukuk issuance totalled US$66.4 billion last year, with Malaysia being the world’s largest sukuk market.
In March 2015, Malaysia’s sukuk issuances accounted for 58% of the global US$308 billion outstanding sukuk.
Another speaker, Employees Provident Fund chief executive officer Datuk Shahril Ridza Ridzuan, said there has been limited growth in the global issuance of sukuk to certain issuing markets and issuers.

“Hopefully, if we can move away from this preoccupation with syariah financing purely on faith-based systems towards sustainability, then I think that’s the right way forward to improve growth of this market.

(The Edge Markets / 13 May 2016)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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