Saturday, 28 February 2015

Event Summary (KLCIF2015) - KL Conference on Islamic Finance 2015


KL Conference on Islamic Finance 2015


Date    : 17-18 March 2015
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 17 February 2015
Malaysian   :  RM1,500
International  :  USD600

Normal Fee:
Registration with payment after 17 February 2015
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 20% discount for third and subsequent 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


Lahore

Russia Recognizes the Benefits of Islamic Banking

It’s very hard to conceptualize a banking without interest. Interest after all is the primary fuel and the metric of success in commercial banking. Well, thanks to Islamic prohibitions against charging interest, there is a very robust branch of alternative banking called Islamic banking.
Islamic banking doesn’t look money as a commodity. Instead, it looks at commercial transactions and makes its money off the commercial transactions made possible by its lending activities. Compare this with conventional banking where the bank is focused solely on the amount of money it lends out and the amount of money it collects. The amount of money it collects has to have an interest because that’s how it measures its success. Islamic banking, on the other hand, lends out money but profit and losses are shared by the bank. In other words, the money lent out by the bank is not the primary measurement of success, but the economic activity made possible by those funds.
This may seem mind-blowing and foreign to many economies focused on conventional banking. However, Islamic banking actually accounts for $2.6 trillion of global economic activity, and that rate is growing. It is no surprise that the UK, South Africa, and Luxembourg have forayed into this specialty type of banking. Now Russia is looking into Islamic finance.
There’s a lot of money to be made in Islamic finance. At the very least, if Russia opens its first Islamic bank, it might be able to attract capital from Indonesia, Malaysia, Arab states, and the cash-rich United Arab Emirates. This will be Russia’s way of getting around the tough international financial sanctions it’s facing due to its involvement in the Ukrainian civil war. Russia is looking towards Islamic banking as a way to keep the Russian economy from sliding towards a recession.
The Russian economy has been through a tough time recently. In addition to the sanctions, it’s been hammered hard by the crash in global oil prices. This is a seriously bad news for Russia because the vast majority of its GDP comes from its energy exports.
(Street Wise Journal / 27 February 2015)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Thursday, 26 February 2015

Garuda considers issuing global sukuk


National flag carrier Garuda Indonesia (GIAA) is mulling over a global sukuk issuance this year, with the aim of raising US$500 million to refinance its maturing debt.

According to I Gusti Ngurah “Ari” Askhara Danadiputra, Garuda’s chief financial officer and risk management head, the bond issuance will probably take place in mid-April.

“We are still in the preparation stage and we have not officially appointed any financial institution to arrange the bond issuance, but we are hoping to secure funds from investors in Asia, Europe and the Middle East,” he told reporters on Tuesday.

Part of the funds generated from the sukuk sale will be used to refinance the airline’s debt, worth $350 million, which will mature this year. The remaining $150 million of the funds will be used for various general purposes, including capital expenditure.

“The selection of sukuk is based on our desire to attract Middle Eastern investors. It may be easier for us as well because sukuk issuance does not require the issuer to obtain credit ratings from rating agencies,” Ari said.

He added that the debt papers would most likely be listed overseas, in a Middle Eastern country. If all goes ahead as planned, Garuda will become the first Indonesian company to offer global Islamic bonds.

In preparation for the bond issuance, Garuda has obtained a bridge loan worth $400 million from the National Bank of Abu Dhabi (NBAD) and Dubai Islamic Bank PJSC (DIB).

The loan agreement — which will mature after 12 months — was signed on Feb. 18, as stated in a document submitted by the company to the Indonesia Stock Exchange (IDX).

According to Ari, the bridge loan will function as a “back stop facility” if the sukuk issuance does not go according to plan.

Back stops are commonly used as a guarantee that a bond issuer will still obtain the needed funds, even if the debt paper sale fails.

“The back stop facility will mature after seven years and by then, the facility will be worth $500 million, equal to our sukuk target,” he said, adding that the NBAD and DIB had expressed interest in being coordinators in the sukuk sale.

Meanwhile, Ari said that the airline aimed to post net profits from its operations this year, overturning net losses that it recorded during the January to September 2014 period. The company has not yet published its 2014 full-year financial report.

“To overturn the situation, we decided to cut several routes that were not profitable, reduce flight frequencies for other routes and increase flight frequencies for routes that are making money, such as the one to Jeddah [in Saudi Arabia],” he said.

The company plans to open up new routes across Java as well as use smaller aircraft to boost its business.

Ari also claimed that the airline had identified up to $148 million of funds that it could potentially save through various cost efficiencies.

A $17 million portion of those savings came from a cross-currency swap agreement that it recently signed with lenders Bank Negara Indonesia (BNI), Standard Chartered Bank Indonesia and CIMB Niaga.

Following the announcement of its sukuk plan, Garuda saw its shares slump 1.8 percent to Rp 535 (4 US cents) per share on the IDX from a day before


(The Jakarta Post / 25 February 2014)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Britain to lead the world in Islamic finance

London has set its sights on becoming the world centre for the Islamic finance industry according to the UK's foreign office minister for Middle East.
Speaking at The Telegraph's Middle East Congress on Wednesday, Tobias Ellwood, under secretary of state at the Foreign Office, said the capital had ambitions to stand alongside Dubai and Kuala Lumpur as a global hub for Islamic finance.
Britain became the first country outside the Muslim world to issue an Islamic bond, known as Sukuk, last year.
The £200m bond attracted healthy investor interest and was the first step in encouraging wider investment from the region to the City of London.
Britain was also committed to promoting a "peaceful and prosperous" Middle East and expanding trade ties with the region, which topped £35bn last year, said Mr Ellwood
"A long-term security strategy must have prosperity at its heart."
Islamic finance products comply with religious rulings, known as sharia, to pool risk and prohibit traditional interest payments.
There are currently six Islamic banks in Britain, while another 20 lenders currently offer Islamic financial products and services, more than any other Western country.
Chancellor George Osborne has said promoting the Islamic finance industry, which is worth nearly $2 trillion, would help make Britain “the undisputed centre of the global financial system".
Mr Ellwood also celebrated notable sharia-compliant investments that have been used to fund some of the capital’s largest developments, including The Shard and the Olympic Village.
The sovereign Sukuk market, which makes up only 0.1pc of global financial assets, is predicted to expand by 20pc a year, according Robert Gray, chairman of debt finance at HSBC.
Sukuk provide fixed returns from underlying assets, thus bypassing the Islamic prohibition on receiving interest.
Mr Gray added the recent fall in oil prices would not hinder the industry and could stimulate the issuance of Sharia compliant debt from the likes of Saudi Arabia.
With a depth of reserves, Gulf nations have a “strong capacity to accept more debt and a strong inclination to use Islamic capital markets”, said Mr Gray.
(The Telegraph / 25 February 2015)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Tuesday, 24 February 2015

Nigeria’s Central Bank Centralises Regulation Of Islamic Banking

VENTURES AFRICA – Nigeria’s Central Bank has become the latest regulator to opt for a centralised approach to Islamic Banking after it issued guidelines for an advisory body that will oversee the industry in the country. Nigeria has the largest Muslim population in sub-Saharan Africa, virtually half of the country’s 170 million people.
The advisory body, known as the Financial Regulation Advisory Council of Experts, will be tasked with ensuring all banking products that are designated as Islamic conform to sharia principles. The Central Bank guidelines, published on Friday, set out minimum requirements for the advisory body, which will comprise a minimum of five members including one of its official. Members will serve renewable two-year terms, must be qualified in Islamic jurisprudence, and are restricted from working for any other financial institution supervised by the central bank.  The guideline also stipulates that the advisory body will be guided by the principles of sharia governance issued by the Malaysia-based Islamic Financial Services Board.
Although Islamic banks have long practiced self-regulation, a centralised model of supervision is increasingly being favoured across much of the world. Morocco is one of the several countries that have adopted such format in a bid to limit differences between products, speed the design of new products and boost investor confidence
Financial institutions that offer Islamic banking products in Nigeria are already required to have their own boards of sharia finance experts, who are limited to serving in one institution at a time. However, the centralization is part of the effort to establish the country as the African hub for Islamic finance.
(Ventures / 23 February 2015)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Central Bank of Nigeria (CBN) Sets Guidelines For Islamic Finance Advisory Body

The Central Bank of Nigeria (CBN) has issued guidelines for an advisory body that will oversee Islamic banking in Nigeria, becoming the latest regulator to opt for a centralised approach to the industry.
Nigeria’s advisory body, known as the Financial Regulation Advisory Council of Experts, will be tasked with ensuring all banking products that are designated as Islamic conform to sharia principles.
The guidelines, published on Friday, set out minimum requirements for the advisory body, which will comprise a minimum of five members including a CBN official.
Members will serve renewable two-year terms, must be qualified in Islamic jurisprudence, and are restricted from working for any other financial institution supervised by the CBN.
Financial institutions that offer Islamic banking products in Nigeria are already required to have their own boards of sharia finance experts, who are limited to serving in one institution at a time.
The CBN’s advisory body will be guided by the principles of sharia governance issued by the Malaysia-based Islamic Financial Services Board.
Countries including Bahrain and Morocco have opted for such a format, which can help to limit differences between products, speed the design of new products and boost investor confidence.
(Channel Television / 23 February 2014)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Monday, 23 February 2015

Indonesia plans to create USD8bn mega-Islamic bank

According to the chairman of Indonesia's Financial Services Authority, Muliaman Hadad, the merger between the Islamic finance units of government-controlled Bank Mandiri, Bank Rakyat Indonesia and Bank Negara Indonesia, as well as a small unit of Bank Tabungan Negara, could happen as early as this year. 

The idea behind the mega-merger is to create an Islamic banking institution that would be able to face the growing foreign competition in Shariah-banking in Indonesia through so-called "Islamic windows" of conventional banks, as well as to boost the currently quite small market share of Islamic finance in the country of about 5% four-fold to 20% by 2018, as per a forecast by the Indonesia Islamic Banking Association, bringing the share on par with Malaysia. 

The new Islamic mega-bank would also be a catalyst for new products for retail customers and businesses and generally improve public awareness of Shariah-compliant finance. It would have lower operating costs and through its combined asset base would be able to finance larger infrastructure projects in the country, Hadad argued. 

Together with a five-year roadmap for Islamic banking development drafted by Indonesia's Financial Services Authority, the new focus on Islamic finance should correct the imbalance between Indonesia's huge Muslim population and their low use of Shariah-compliant financial products and services. For example, while the number of Indonesia's Muslims is 12 times higher than Malaysia's - Indonesia also has the largest Muslim population of any country in the world - total deposits at Islamic banks are less than a sixth of Malaysia's, the Jakarta Globe cited official data. The roadmap thus plans to introduce clear new regulations on Islamic finance, as well as incentives to attract first-time investors to the Islamic finance market. It also will seek that the new mega-Islamic bank will integrate itself into the global financial system by bringing its risk management and capital requirements in line with international standards.

Compared internationally, with just $24bn, Indonesia's Islamic banking assets are currently just slightly above the UK's, where Islamic banking has grown impressively in the recent past and reached an asset base of $19bn as per 2014. They are also significantly lower than Saudi Arabia's ($260bn), the UAE's ($90bn) and Qatar's ($60bn). Malaysia's Islamic finance assets are worth around $115bn as of 2014. 

With regards to foreign investors, Indonesia has already tested the appetite for sukuks, or Islamic bonds. In September last year, a US-dollar denominated $1.5bn sovereign sukuk had an orderbook comprising $10bn worth of bids submitted by foreign investors, having been more than 6-time oversubscribed. The huge demand for this bond has prompted the Indonesian government to come back with another sukuk issue as early as in the first half of 2015.

Economists also point at a regulation that requires conventional banks in Indonesia to separate their "Islamic windows" - or Islamic banking units of which there are more than 20 currently in operation by domestic and foreign conventional banks- into dedicated standalone institutions by 2023 similar to what the Qatar Central Bank asked conventional banks in Qatar to do in 2012. It is expected that this regulation will lead to a noticeable consolidation among such "Islamic window" units in the coming years in Indonesia.


(Zawya / 22 February 2014)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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