Tuesday, 21 April 2015

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

KL Conference on Islamic Finance 2015

Date    : 18-19 August 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

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

Among the speakers are:

- 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 

Early Bird Fee: 
Registration with payment by 16 July 2015
Malaysian   :  RM1,500
International  :  USD600

Normal Fee:
Registration with payment after 16 July 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.

(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




Grand Seasons Hotel, Kuala Lumpur - Malaysia


Kuala Lumpur


IFSB guidance for Islamic banks may spur sukuk issues, deposit insurance

The Kuala Lumpur-based Islamic Financial Services Board (IFSB) has released final guidance on liquidity risk management for Islamic banks, which may spur national authorities to issue more sukuk and establish sharia-compliant deposit insurance schemes.
The guidance note, known as GN-6, clarifies the tools that Islamic banks can use to meet Basel III regulatory requirements, now being phased in for both conventional and sharia-compliant banks around the world.
It defines the types of high-quality liquid assets (HQLA) that Islamic banks can hold and the weights that should be assigned to Islamic deposits, which can be more volatile than conventional ones for various reasons, including the fact that they have relatively short maturities.
HQLA must have low correlation with risky assets, an active secondary market and low volatility. The highest level of HQLA includes sukuk (Islamic bonds) issued by sovereigns, multilateral development banks and the Malaysia-based Islamic Liquidity Management Corp.
Such HQLA should be accepted by central banks as collateral in their liquidity facilities, the guidance note says. The note could therefore encourage issuance of HQLA and local currency sukuk by sovereigns and their central banks, credit rating agency Standard & Poor's said in a research note.
"Based on the size of the Islamic finance industry, its composition, and its growth trajectory, we estimate the need for HQLA to reach about $100 billion in the next few years," S&P added.
The guidance note also details three arrangements that regulators can use to meet Basel III requirements in more undeveloped banking markets: central bank liquidity facilities, foreign currency HQLA that could be used to cover domestic currency liquidity needs, and expanded use of lower-level HQLA.
In the long term, the guidance note will also encourage regulators to develop Islamic deposit insurance schemes to reduce the need for HQLA, S&P said.
The note says such schemes could significantly lower the run-off rates, or weights, that are assigned to deposits. The riskier the funding source, the larger the amount of HQLAs needed to cover deposits.
For deposits classified as "stable", the IFSB guidance applies a 5 percent run-off factor, but this can be cut to 3 percent if a deposit insurance scheme is in place that is based on a prefunding system and is available quickly.
For less stable deposits, a minimum run-off rate of 10 percent is to be applied, the guidance note says.

The IFSB note classifies foreign currency-denominated retail accounts, which are large at some Islamic lenders, in the less stable category.
(Reuters / 20 April 2015)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Azerbaijan’s Islamic banking skills to drive Russian Islamic finance development

Islamic finance industry in Russia still needs to be developed, despite some 20 million Muslims living in the country, and Azerbaijan’s skills maybe helpful for Russia.
Russia hopes to learn from the experience of Azerbaijan in the field of Islamic banking, said Sergey Drobyshevsky, the scientific director of the Gaidar Institute for Economic Policy in Baku last week.
He said the presence of IBA Moscow, a Russian subsidiary of the International Bank of Azerbaijan, the largest lender and the only state-owned bank in Azerbaijan, must contribute to this.
Drobyshevsky believes it will be easier for the Azerbaijani banks and businessmen to work in Russia than the Malaysian specialists of that sphere, where Islamic banking is also developed.
“There is no language barrier between Azerbaijan and Russia, they have similar culture and a lot in common,” said Drobyshevsky.
He also touched upon the prospects for the development of Islamic banking in Russia.
“The more financial instruments the market has, the more differentiated they are, the more effectively it helps investors to diversify their risks, according to the theory of finance,” he said. “These are new possibilities and their implementation does not depend on the state - it depends on the participants of the market themselves and potential customers of Islamic banking.”
Islamic banking can claim only 5 percent of the Russian financial market during 5-10 years, but the main thing is to start the process, Drobyshevsky emphasized, Trend reports.
Behnam Gurbanzada, the director of Islamic banking at the IBA, earlier called Russia a "promising" platform to further the development of Islamic finance.
“Azerbaijan with all prerequisites to build a bridge between Asia and the Middle East, as well as between the CIS and the Gulf countries, is supposed to receive good financial dividends from applying Islamic banking. The IBA is keen to develop a plan of amendments to the regulatory to apply the full-fledged Islamic banking in the country. The amendments can fasten up the process of creating the Islamic development center in Azerbaijan,” he told AzerNews earlier.
The Baku-based IBA is a universal bank with subsidiary banks in Russia, Georgia and Qatar, as well as representative offices in London, Frankfurt, Luxembourg, Dubai and New York. The bank, 50.2-percent owned by the Azerbaijani Ministry of Finance, holds over 40 percent of banking assets in the country.
The IBA‘s reported consolidated total assets of 8.8 billion manats, aggregate capital of 1.008 billion manats and net profit of 64.5 million under audited IFRS as at year-end 2014.
(Azernews / 20 April 2015)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Monday, 20 April 2015

China Readies for Islamic Finance With a Little Help From Gulf

The most populous country in the world may be poised to get serious about Islamic finance, and banks in the Gulf Cooperation Council are taking note.

Qatar International Islamic Bank QSC and QNB Capital LLC last week signed an agreement with China-based Southwest Securities Co. to develop Shariah-compliant finance products in the country. Seven months after Hong Kong sold its debut sukuk, China is exploring Islamic finance for projects from hospitals to metro stations, according to London-based Dome Advisory Ltd., which is working with a government-owned fund in Shanghai to finance five projects.
“The Hong Kong sukuk has given more confidence to the Chinese market,” Sheikh Bilal Khan, a Shariah scholar and director of Dome, said by phone on April 16. “Having seen Hong Kong and the U.K. do this, and the fact Islamic finance is growing at a fast rate, in the next three to five years China will be a big player. It’s unavoidable.”
China’s growing interest in Shariah-compliant finance will add momentum to an industry that Ernst & Young LLP estimates will grow to $3.4 trillion by 2018, from $1.7 trillion two years ago. The world’s second-biggest economy in January approved plans to accelerate 300 infrastructure projects valued at 7 trillion yuan ($1.1 trillion), according to people with knowledge of the matter, in an effort to boost an economy expanding at the slowest pace since 1990.

Hong Kong Debut

Southwest Securities, based in Chongqing and majority-owned by the city’s state-owned enterprises, is seeking access to investors “primarily in Qatar and the Middle East,” according to an e-mailed statement from Qatar International Islamic Bank last week. The partnership is also intended to help the Qatari lenders access the Chinese market. The country is Qatar’s fourth-biggest trading partner, according to data compiled by Bloomberg.
Ningxia, an autonomous region in northwest China where a third of the 6.5 million population are Muslim, plans a $1.5 billion sukuk sale, according to a December exchange filing.
Hong Kong, the city that returned to Chinese rule from the British in 1997, sold $1 billion of five-year sukuk in 2014 and said it wants to become an Islamic finance hub. The notes yielded 1.74 percent on April 17, according to data compiled by Bloomberg. National Bank of Abu Dhabi PJSC, the United Arab Emirates’ biggest lender by assets, Abu Dhabi Islamic Bank PJSC, Dubai-based Emirates NBD PJSC and Qatar’s QInvest LLC all worked on the deal.

China Calling

While China in August allowed local governments to sell bonds directly to refinance debt following a two-decade ban, the country will need to make more regulatory changes to promote Islamic finance, according to Rizwan Kanji, a Dubai-based partner at law firm King & Spalding LLP, who helps structure Islamic deals.
“It’s the first step in the right direction, but there is work to be done before we see successful issuances,” he said by phone on April 16. Investors need a better understanding of the legal infrastructure and “enforceability issues,” he said.
China’s economy is forecast to expand 7 percent in 2015, according to median of 60 economists’ estimates compiled by Bloomberg, the slowest pace in about 25 years. The projects approved in January span industries including oil and gas pipelines, health, clean energy, transportation and mining, and will be funded by the central and local governments, state-owned firms, loans and the private sector, the people said.
“There’s a lot of appetite for GCC money,” Dome’s Khan said. “This agreement will hopefully pave the way for Islamic finance to pick up steam in mainland China.
(Bloomberg Business / 20 April 2015)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Saturday, 18 April 2015

Malaysia's Successful Sukuk Issuance Reflects Its Position As Leading Islamic Finance Hub

KUALA LUMPUR, April 17 (Bernama) -- The success of Malaysia's US$1.5 billion sukuk issuance on Wednesday not only boosted investor sentiment but also reflects the country's position as the world's leading Islamic financial hub.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan said the bond was sold at a very reasonable rate and was well absorbed by global investors after the last issuance in 2011.

"Despite the 1MDB (1Malaysia Development Bhd) concerns, weakening ringgit and other uncertainties, we were still able to sell the sukuk with a very good yield," he told Bernama today.

The fact that the sukuk was able to attract global investors, particularly from the Middle East has suggested that the government's economic fundamentals remained healthy despite the ringgit trading at around 3.65 against the greenback.

On a possible downgrade, Nazri said it was not a consensus among the three main rating agencies, namely, Moody's Investors Service, S&P Ratings and Fitch Ratings.

Despite saying that Fitch was entitled to its own opinion on a possible downgrade, Nazri hoped it would not materialise as palm oil offtake were improving, the ringgit was strengthening and the government's tax restructuring plan was expected to boost the export sector.

The success of Malaysia's sukuk issuance, after a lapse of almost four years, has drawn positive response from international investors who have reaffirmed their confidence in the country's long-term economic fundamentals.

(Bernama.Com / 17 April 2015)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Babacan promotes Islamic finance in US

Economic risks that arose after the crisis in 2008 were better managed under Islamic finance models when compared to other schemes, as they offered additional financial instruments with shared risks and less uncertainty, Deputy Prime MinisterAli Babacan said in Washington on Friday.
Speaking on the sidelines of annual spring meetings held jointly by the International Monetary Fund (IMF) and the World Bank, Babacan stressed that Islamic finance models are compatible with other financial models used across the world.
Highlighting that Turkey, as the rotating chair of the G20 group, appreciates the virtues of the Islamic finance models, Babacan also pointed to the inclusiveness of these models, referring to the millions of people in Muslim countries who are sensitive to Islamic rules but who avoid entering the global financial system due to a lack of options.
Previewing the G-20 discussions, Babacan told reporters on Thursday that the G-20 countries needed to do more to carry out commitments they made last year to jumpstart growth by investing in infrastructure projects and removing barriers to trade. "Growth is there, but it is weak ... and uneven," he said.
The finance ministers will produce a plan of action to be discussed by US President Barack Obama and other G-20 leaders at a scheduled summit in Turkey in November, as they attempt to boost global economic output by more than $2 trillion over the next five years. These finance officials from the world's major economies are searching for a mix of policies that will bolster a still-weak global recovery, nearly six years after a recession, while confronting a range of new threats from a soaring US dollar to a big drop in oil prices. The financial officials from the group of 20 nations also expressed concerns regarding potential market instability once the US Federal Reserve starts increasing a key interest rate which has been at a record low, near zero, since late 2008.
The discussions were being held among finance ministers and central bank presidents representing traditional economic powers such as the United States, Japan and Germany, as well as emerging countries such as China, India and Brazil. Treasury Secretary Jacob Lew and Federal Reserve Chair Janet Yellen represented the United States at the meetings, which began with a dinner on Thursday night and concluded with a news conference on Friday afternoon. Ali Babacan will sum up the group's discussions.
The G-20 talks came ahead of the spring meetings of the 188-nation IMF and its sister lending organization, the World Bank.
In addition to concerns about boosting global growth, the meetings were also to address issues including a plea for more aid to fight the Ebola outbreak in the West African nations of Liberia, Guinea and Sierra Leone. The presidents of those three nations were scheduled to meet with World Bank President Jim Yong Kim and UN Secretary-General Ban Ki-moon on Friday.
The meetings took place when much of the global economy remains stuck in a prolonged period of sluggish growth following the 2008 financial crisis and a recession that was the worst in seven decades. IMF Managing Director Christine Lagarde told reporters on Thursday: "The good news is that the global recovery continues. The not-so-good news is that growth remains moderate and uneven." She said the goal of this week's talks was to produce a revamped plan of action that will "prevent this new mediocre [growth] from becoming the new reality.”
The IMF's latest economic forecast predicted only modest overall growth and downgraded the prospects for some nations, including the United States, forecasting US growth of just 3.1 percent this year, a half-point lower than its January estimate. The reason: IMF economists believe the sharp rise in the value of the dollar will hurt American companies trying to export goods overseas. Growth prospects in oil-exporting nations are being hurt by the big drop in oil prices over the past year, but those declines are expected to boost prospects in many oil-importing countries.
This week the IMF also raised new concerns that severe volatility in financial markets could be triggered if the Federal Reserve moves, as is widely expected, to start raising interest rates later this year. If the Fed's rate hikes after a prolonged period of ultra-low rates, causing investors to rush for the exits, it could cause stock prices to tumble and interest rates to rise sharply.
(Todays Zaman / 17 April 2015)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Friday, 17 April 2015

Malaysia successfully prices US$1.5bil global sukuk

KUALA LUMPUR: Malaysia has successfully priced US$1 billion of 10-year and US$500 million of 30-year benchmark Trust Certificates  (Sukuk) for a total deal size of US$1.5 billion.
The Ministry of Finance, in a statement, said, the 30-year tranche was the governments inaugural sukuk issuance which is the longest tenured sukuk ever by a sovereign. 
The deal was oversubscribed, attracting an aggregate interest of over US$9 billion from a combined investor base of over 450 accounts, it said.
The 10-year tranche was oversubscribed by almost seven times and the 30-year tranche was oversubscribed by approximately six times.
The sukuk, issued via a special purpose entity, Malaysia Sovereign Sukuk Bhd, employed a structure utilising Shariah-compliant commodities, leasable assets and non-physical income-generating assets (in the form of rights to participate in the provision of services), a world first for a sovereign sukuk. 
The ministry added that the offering marked the country's fourth US dollar-denominated sovereign global sukuk issuance, following its successful global sukuk issuances in 2002, 2010 and 2011.
Proceeds from the offering would be used by Malaysia for Shariah compliant general purposes, specifically for the redemption of 1Malaysia Sukuk Global Bhds US$1.25 billion Trust Certificates due in June 2015, as well as, to finance development expenditures.
"We are delighted to bring this ground-breaking Sukuk to the growing Islamic finance market. We are extremely pleased with the success of this deal and the confidence of the global investors in the Malaysian credit story", said  Treasury Secretary-General Tan Sri Dr Mohd Irwan Serigar Abdullah.
The 10-year tranche was allocated to investors in the Middle-East (24 per cent), Asia (50 per cent), Europe (16 per cent) and the United States (10 per cent), while the 30-year tranche was allocated to investors in the Middle-East (2 per cent), Asia (50 per cent), Europe (19 per cent) and the United States (29 per cent).
The deal was priced at the tighter end of the revised price guidance reflecting investors confidence, strong external position, monetary flexibility, fiscal sustainability, as well as, diversified and competitive Malaysian economy.
The sukuk are expected to be assigned ratings of A- by Standard and Poors Ratings Services and A3 by Moodys Investors Services Limited.

The deal was successfully priced following a global investor road show across key financial centres, comprising Kuala Lumpur, Hong Kong, Singapore, Abu Dhabi, Dubai, London and New York.
CIMB Investment Bank Bhd, The Hongkong and Shanghai Banking Corporation Limited and Standard Chartered Bank acted as the joint bookrunners and joint lead managers for the global Sukuk offering.

(The Star Online / 16 April 2015)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Alfalah Consulting's facebook