SINGAPORE: Maybank Islamic, Asia-Pacific's largest syariah lender, will grow its business in the Asean region and may offer Islamic stockbroking services through Singapore stockbroker Kim Eng, which its parent recently acquired.
Islamic finance is gaining traction in a region where traditionally it has been most popular in Malaysia and Indonesia, said Muzaffar Hisham, Maybank Islamic's chief executive.
Sabana REIT, Singapore's first syariah-compliant real estate investment trust, and Khazanah Nasional's S$1.5 billion (RM3.67 billion) sukuk issue were proof that Islamic finance was gaining ground in Singapore, he said. (source)
Islamic finance is gaining traction in a region where traditionally it has been most popular in Malaysia and Indonesia, said Muzaffar Hisham, Maybank Islamic's chief executive.
Sabana REIT, Singapore's first syariah-compliant real estate investment trust, and Khazanah Nasional's S$1.5 billion (RM3.67 billion) sukuk issue were proof that Islamic finance was gaining ground in Singapore, he said. (source)
"While we're trying to grow in terms of our various businesses in Malaysia, regionalisation and going forward from these various markets Brunei, Singapore, Indonesia and Thailand is key to us," Muzaffar said in an interview on the sidelines of an Islamic banking conference in Singapore.
Asean comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Sabana REIT, the world's largest syariah-compliant property trust, sold 508 million units at S$1.05 (RM2.57) each in its initial public offering in late 2010. The initial public offering was 2.5-times subscribed.
The bank's parent Maybank is embarking on an expansion drive to become a regional bank. It operates in 14 countries including Cambodia, Indonesia, Pakistan and Bahrain and recently offered to buy shares in Singapore's Kim Eng that it did not already own for S$3.10 (RM7.59) each.
Maybank is also bidding to take over rival RHB Capital, in what could be Asia-Pacific's fourth-biggest banking deal.
Muzaffar said Maybank Islamic would consider providing Islamic stockbroking to regional countries through Kim Eng.
"We need to look at the markets and whether in terms of returns and value proposition to our colleagues in Kim Eng and the investment banking side would make sense but it's something to explore," said Muzaffar, who was appointed in March.
The taxation framework, which can make Islamic financial instruments more costly than conventional tools, is a challenge in growing the sharia banking business in the region, Muzaffar said.
Islamic finance prohibits lending on interest and financing is typically structured as asset sales which can attract taxation at several levels, resulting in higher costs.
Malaysia has altered regulations to ensure that syariah bonds have the same tax treatment as conventional debt issues.Indonesia, Singapore and Hong Kong all have some form of tax neutrality for Islamic financial instruments. Maybank Islamic had RM47 billion of assets as at end December 2010. - Reuters
Sabana REIT, the world's largest syariah-compliant property trust, sold 508 million units at S$1.05 (RM2.57) each in its initial public offering in late 2010. The initial public offering was 2.5-times subscribed.
The bank's parent Maybank is embarking on an expansion drive to become a regional bank. It operates in 14 countries including Cambodia, Indonesia, Pakistan and Bahrain and recently offered to buy shares in Singapore's Kim Eng that it did not already own for S$3.10 (RM7.59) each.
Maybank is also bidding to take over rival RHB Capital, in what could be Asia-Pacific's fourth-biggest banking deal.
Muzaffar said Maybank Islamic would consider providing Islamic stockbroking to regional countries through Kim Eng.
"We need to look at the markets and whether in terms of returns and value proposition to our colleagues in Kim Eng and the investment banking side would make sense but it's something to explore," said Muzaffar, who was appointed in March.
The taxation framework, which can make Islamic financial instruments more costly than conventional tools, is a challenge in growing the sharia banking business in the region, Muzaffar said.
Islamic finance prohibits lending on interest and financing is typically structured as asset sales which can attract taxation at several levels, resulting in higher costs.
Malaysia has altered regulations to ensure that syariah bonds have the same tax treatment as conventional debt issues.Indonesia, Singapore and Hong Kong all have some form of tax neutrality for Islamic financial instruments. Maybank Islamic had RM47 billion of assets as at end December 2010. - Reuters
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