INDONESIA - FOREIGN - Affin up on Bank Muamalat Malaysia stake buy talks

www.btimes.com.my -KUALA LUMPUR: Affin Holdings Bhd, Malaysia’s smallest banking group by market value, rallied the most in a month after obtaining central bank approval to start talks to buy a stake in the country’s second-oldest Islamic bank.

The stock advanced as much as 2.3 per cent in Kuala Lumpur trading to RM3.56. It pared gains to RM3.54 at 11:50am, poised for its steepest increase since July 18. It was the second-biggest increase in the Bursa Malaysia Finance Index, which climbed 0.3 per cent.

Acquiring a stake in Bank Muamalat Malaysia Bhd may increase Affin’s scale and help strengthen its position in the Southeast Asian nation’s Islamic banking industry, according to a brokerage report by Alliance Financial Group Bhd today. Bank Muamalat was formed in 1999, the second full-fledged Islamic bank set up in the country after Bank Islam Malaysia Bhd.  (source)

INDONESIA - REGULATIONS - Indonesia's new bank rules may not hit Maybank, CIMB

www.btimes.com.my - KUALA LUMPUR:Indonesia's central bank has issued new rules limiting single ownership in domestic banks at 40 per cent but allows exemptions that could let Malaysia's top two lenders hold on to their controlling stakes in banks there. Bank Indonesia, in a statement on Wednesday, said public-listed financial institutions will be allowed to keep their current ownership structures in Indonesian banks, provided they maintain high levels of corporate governance and financial health, including a tier-1 capital ratio of over six per cent.

From December 2013, those that see their corporate governance and financial health ratings fall to unacceptable levels for three consecutive reporting periods will have to sell their stakes down to the new limit.  (source)

INDONESIA - BANKING - CIMB offers 1st Indonesian fixed returns

www.btimes.com.my - CIMB Group Holdings Ltd, Malaysia’s second-biggest Islamic bank, is introducing Indonesia’s first Shariah-compliant fixed returns on deposits, five years after their adoption in its home market.

PT Bank CIMB Niaga Syariah, a unit of the Kuala Lumpur- based bank, started offering the accounts to lenders on June 24 and plans to introduce them for consumers, Badlisyah Abdul Ghani, the head of Islamic banking at the parent, said in a July 4 interview. Indonesia’s Islamic finance assets total 147.9 trillion rupiah (US$15.6 billion), trailing Malaysia’s RM350.4 billion (US$110 billion), partly because depositors only receive floating payments based on profits or price swings.  (source)

MALAYSIA - OPINION - Ramadan wish list for Islamic finance

www.btimes.com.my - WHAT THE GOAL IS: The central issue is about the industry controlling its own destiny
“Behind every success is endeavour… behind endeavour, ability… behind ability, knowledge… behind knowledge, a seeker ….” Unknown.
AS THE blessed month of Ramadan arrives, here is my “seeking” list for Islamic finance. It’s not about another voice asking when the International Islamic Liquidity Management Corporation (IILM) will issue its first paper or disagreeing with CIMB Group CEO Datuk Seri Nazir Razak’s comment on “rolling back” government’s involvement in business, but more to do with controlling our own Islamic finance manifest destiny.   (source)

MALAYSIA - BANKING - Stanchart to make KL its Islamic banking hub

www.btimes.com.my - UPBEAT MOOD: Lender seeks to capitalise on Malaysia’s long-standing experience and expertise in the sector

MALAYSIA'S efforts to become an international Islamic finance centre have received a boost as the country's oldest bank, Standard Chartered Bank, (StanChart) is making Kuala Lumpur its global hub for Islamic consumer banking.

The bank's new global hub will be led by Wasim Saifi, the new chief executive officer (CEO) of Standard Chartered Saadiq Bhd (Saadiq Malaysia). Wasim is also StanChart global head of Islamic consumer banking.  (source)

MALAYSIA - BANKING - CIMB takes aim at Goldman, JPMorgan

www.btimes.com.my - CIMB Group Holdings Bhd, Southeast Asia’s top-ranked investment bank over the past three years, is taking aim at a bigger market following its acquisition of some of Royal Bank of Scotland Group Plc’s operations in Asia.

The Malaysian company can now compete with rivals including Goldman Sachs Group Inc and JPMorgan Chase & Co for Asia- Pacific deals, Chief Executive Officer Nazir Razak said in an interview in Kuala Lumpur. CIMB agreed in April to buy most of Edinburgh-based RBS’s investment banking and cash equities businesses in the region for US$142 million.

The acquisition, which initially seemed to be an “audacious” idea, will complete the bank’s operations and help CIMB boost market capitalization to more than RM100 billion (US$31 billion) by 2015, Nazir said. That’s about 75 percent more than its current value. The Kuala Lumpur-based lender also targets becoming one of the top three Southeast Asian banks by assets and return on equity.  (source)

MALAYSIA - BANKING - Maybank IB downgrades BIMB to 'sell'

www.btimes.com.my -Maybank IB Research has downgraded BIMB Holdings Bhd to "sell" from "buy"’ as it sees the recent run-up in the Islamic financial institution’s share price as excessive.

“Much as we continue to view Bank Islam’s and Syarikat Takaful Malaysia Bhd’s (BIMB’s units) prospects positively, the recent run-up in BIMB’s share price is cause to pause and take stock,” the research house said in a note on Monday. (source)

MALAYSIA - BANKING - Al-Rajhi bank unveils Commodity Murabahah

www.btimes.com.my - Al Rajhi Bank Malaysia on Monday introduced Collateralised Commodity Murabahah-i (CCM-i) as a new instrument for its Treasury use and is pleased to be the first Islamic financial institution to adopt such instrument in managing its daily money market transactions. The announcement was made at their Kuantan Branch launching ceremony which was graced by YAB Dato’ Seri DiRaja Adnan Yaakob, Menteri Besar Pahang.

On a similar note, in its recent announcement, Bank Negara Malaysia (BNM) has recently introduced the Collateralised Murabahah instrument. CCM-i, based on a Commodity Murabahah transaction and backed by a pledge mechanism, was introduced as an alternative solution in addressing the urgent demand of Islamic banks in managing their liquidity. It is a low credit-risk financial instrument for the Islamic interbank money market players under the Bank Negara Malaysia’s Standing Facility guideline; enabling Islamic banks to tap on liquidity by utilising their holdings of tradable sukuks and other acceptable Islamic securities as pledge for their liquidity requirements. (source)

MALAYSIA - OPINION - Islamic finance must finance its diversification

www.btimes.com.my - Islamic finance is usually described as an infant market with domestic focus and supported by the government, hence, much like a baby reliant upon it parents in a home environment of nutrition, nurturing, and natural growth.

“To be competitive in the new world order, one has to think like an immigrant, create like an artisan, work like a start-up and provide service like a waitress, and continuously create a unique value add.” Thomas Friedman, Foreign Affairs Correspondent of the NY Times.

IN a “hyper-connected world, the age of ‘average’ is officially over”. Is Islamic finance hearing and, more importantly, listening?

The baby-cum-toddler is eventually taken off the bottle and consumes “people food”. Islamic finance, unfortunately, is still suckling on the bottle called “real estate” and the natural growth-cum-diversification is a bottleneck risk that needs to be addressed. (source)

INDONESIA - REGULATIONS - Maybank, CIMB can breathe a sigh of relief

www.btimes.com.my - CLOSE CALL: Indonesia’s 40pc single ownership restriction to affect only new investors
IT looks like the country's top two banks, Malayan Banking Bhd (Maybank) and CIMB Group, can heave a sigh of relief as they won't be subject to Indonesia's proposed new rules on bank ownership.

Reuters reported late yesterday that the Indonesian central bank planned to limit single ownership in its banks to 40 per cent, but only for new investments.

"This new regulation will only hold for new initiatives, new investments... there will not be a retroactive regulation," Halim Alamsyah, the central bank deputy governor responsible for banking supervision, told analysts on a conference call, the news wire said. (source)

INDONESIA - BANKING - Indonesia ruling may hurt Malaysian banks' earnings

www.btimes.com.my - KUALA LUMPUR: Malaysia's top two banks could be dealt a bigger blow than expected if Indonesia limits the maximum stake a single shareholder can own in its banks to below 50 per cent, as news reports from Jakarta suggested. A Reuters report yesterday said Bank Indonesia was set to announce next month a reduction in the single-shareholder threshold from 99 per cent currently to a level below 50 per cent. It quoted unnamed sources with direct knowledge of the plan.

A Bisnis Indonesia report, also quoting sources, said the central bank planned to limit the ownership in banks to 40 per cent for financial institutions, 30 per cent for non-financial institutions and 20 per cent for individuals. (source)

MALAYSIA - CAPITAL MARKETS - Malaysia tax breaks spur sukuk rally

www.btimes.com.my - Malaysia’s efforts to become a global hub for Islamic finance by offering tax breaks is driving a record rally in foreign-currency sukuk, and arrangers say interest is increasing among local issuers.

Standard Chartered Plc is in talks with about five companies to manage deals amounting to at least $1 billion, Leon Koay, the Kuala Lumpur-based head of global markets, said in a May 15 interview. The Bloomberg Malaysian Sukuk Ex-MYR Index, which includes notes of Khazanah National Bhd., is rising for a sixth quarter and has gained 9 percent since December 2010. (source)

INDONESIA - INVESTMENT FUND - Al-’Aqar mulls opening trust in Indonesia

www.btimes.com.my - Al-’Aqar Healthcare Real Estate Investment Trust, Malaysia’s oldest Islamic REIT, is considering opening a trust in Indonesia as the nation reviews its first application five years after legalizing such property companies.

Kuala Lumpur-based Al-’Aqar, which already owns two hospitals in Indonesia, would look at registering a trust in the Southeast Asian country provided it gets tax incentives and clearer rules on foreigners owning land are implemented, Executive Director Yusaini Sidek said by e-mail yesterday.(source)

MALAYSIA - COMMODITY MARKETS - Bursa Suq Al-Sila offers palm olein trading

www.btimes.com.my - The world's first end-to-end Syariah-compliant commodity trading platform, Bursa Suq Al-Sila' (BSAS), has added RBD Palm Olein as a new commodity offering.

In a statement today, Bursa Malaysia said this would provide more diverse product offerings for clients trading on the BSAS platform.

"The inclusion of RBD Palm Olein complements BSAS's existing commodities, namely Crude Palm Oil and Plastic Resin," it said. (source)

WORLD - OPINION - Mega bank, stock exchanges and trading platforms

www.btimes.com.my - ISSUES TO CONSIDER: An open letter to Islamic Development Bank president Dr Ahmad Mohamed Ali
DEAR Dr Ahmad Mohamed Ali, president, Islamic Development Bank (IDB) Group;

Asalaam Alaikum,

The Islamic finance world welcomes your comments on the Mega Islamic Bank with much excitement and great sense of anticipation.

“…The ‘Mega Islamic Bank’ comes as an initiative of the Islamic Development Bank in its efforts to address the dearth of senior financiers, the absence of the Islamic tools of stock exchange and the absence of market liquidity between Islamic banks.”

Dr Ali, the Islamic mega bank, working with IDB and industry stakeholders, needs to also include stock exchanges and trading platforms, both Islamic and OIC, as part of the conversation. (source)

INDONESIA - BANKING - Affin interested in acquiring Bank Ina Perdana

www.btimes.com.my - Affin Holdings Bhd is still interested in acquiring at least 51 per cent or a majority stake in Indonesia's PT Bank Ina Perdana, says Chairman Tan Sri Mohd Zahidi Zainuddin.

"We are continuously looking to expand our operations there. "However, we want to get a clear indication from Indonesian regulators about foreign ownership for local banks," he told reporters after the company's annual general meeting here today.

Affin Bank previously revisited its plan to acquire 80 per cent stake in Bank Ina Perdana but put the plan on hold because of a report, which stated that the central bank of Indonesia was considering to cap foreign ownership in its banks to less than 50 per cent. (source)

INDONESIA - BANKING - RHB buyers can enjoy Islamic banking profits (Bank Mestika Dharma)

www.btimes.com.my -

Potential buyers of Malaysia’s RHB Capital Bhd can grab an increasing share of the biggest market for Islamic bonds at a 24 per cent discount to the bank’s rivals.

RHB, whose Islamic banking profits rose ten times faster than total earnings last year, will become Malaysia’s largest stock broker after its acquisition of OSK Investment Bank Bhd, according to data compiled by Malaysia’s stock exchange.  (source)

MALAYSIA - BANKING - Maybank Islamic unveils card for the affluent

www.btimes.com.my - KUALA LUMPUR: Maybank Islamic Bhd has unveiled Maybank Islamic Ikhwan Visa Infinite, a card that it claims offers the best one-for-one privileges from flight tickets, dining to golf.

The card, launched at the World Halal Research Summit last week, is for the affluent market of 35-years-old and above with an income of RM240,000 a year.

Maybank Islamic chief executive officer Muzaffar Hisham said the launch is in line with the bank's commitment to empower card members with its suite of privileges that extend from luxury travel to fine dining. (source)

WORLD - OPINION - SAMI + 3 — Islamic world’s BRICS

ww.btimes.com.my - IDEAL CONFIGURATION: Other Muslim countries can be added easily, without having to change the name
“We must remember that one determined person can make a significant difference, and that a small group of determined people can change the course of history.” Sonia Johnson

THE recent BRICS summit in New Delhi, India, should be a wake-up call for the Muslim world’s own proposed BRICS, called SAMI: Saudi, Ankara, Malaysia and Indonesia.

The BRIC story, Brazil Russia, India and China, started in 2001 by a Goldman Sachs’ Jim O’Neill, “Building Better Global Economics BRICs”. In late 2010, an “S” was added for South Africa. These are growth markets with increasing political clout, and combining for nearly 50 per cent of the world’s population, US$14 trillion (RM42 trillion) GDP, and excess of US$4 trillion (RM12 trillion) foreign reserves (source: Wikipedia).  (source)

WORLD - OPINION - Sound bites in Islamic finance

www.btimes.com.my - “Interest equals disinterest because the lender has nothing to do with the borrower and his business. Islamic finance aims at creating an economy in which one financial dollar equals one real economy dollar.” Yusuf Talal DeLorenzo, syariah scholar
TODAY’S attention span can be described by a seven letter word “TWITTER”. The amount of seconds in a minute, minutes in an hour and hours in a day is the same as far as one can remember, yet we seem to be busier than ever in an information overload world.

It seems the typical time for processing, analysing and drawing conclusions of, say, news headlines is confined to the first few paragraphs of a story and we must act fast in scrolling headlines in real time. (source)