SIDC to hold Islamic market programme

By Habhajan Singh

The week-long Islamic Markets Programme 2008 organised by the Securities Industry Development Corporation (SIDC) that begins on July 6 will bring together a vast number of industry practitioners.

Among them are international scholar and president of the International Institute of Islamic Finance (IIIF) Dr Mohd Daud Bakar, Se cur it ie s Commi ssion (SC) senior Shariah expert Dr Md Nurdin Mgadimon and Bursa Malaysia Bhd Shariah advisor Dr Aznan Hasan.

Among the topics to be discussed are the differences and similarities between Islamic and conventional finance.

Here, trainers will guide participants through the sources of law, underlying contracts of sale, leasing, partnership and wakalah. Also to be discussed will be the characteristics and features of Islamic capital market products for financing and investment.

This workshop will tackle issues relating to sukuk, stocks, funds, real estate investment trusts (REITs) and ETC structured products.

Meanwhile, the programme "Product Innovation: Integrating Shariah and Market Needs", will be led by course director Wan Abdul Rahim Kamil Wan Mohamed Ali (picture).

Other speakers include Badlishah Bashah (SC's Islamic Capital Market project manager for strategy and development), Jennifer Chang (PricewaterhouseCoopers senior executive director for tax services), Azman Ahmad (SC's head for issues and investment), Mohamed Ridza Abdullah (managing partner at Mohamed Ridza & Co) and Mohammad Faiz Azmi (partner at PricewaterhouseCoopers Malaysia).

(The Malaysian Reserve, Page 32, June 30, 2008)

HSBC Amanah eyeing Indonesian sukuk issue

By Habhajan Singh

HSBC Amanah, through its Kuala Lumpur-based Islamic finance practice for the Asia Pacific, is in the running to play a leading role in Indonesia's proposed US$1 billion (RM3.26 billion) global sukuk issuance.

"We certainly hope to be part of that exercise, hopefully a lead part," managing director of HSBC Amanah, HSBC Bank Malaysia Bhd, Yakub Bobat told The Malaysian Reserve in a recent interview (For full interview see P32).

Early this month, Islamic financing policy director in the Indonesian Ministry of Finance Dahlan Siamat told Reuters that the country planned to appoint banks, around July or August, to advise the government on a US$1 billion global Islamic bond issuance.

"We have a good credit rating. Secondly, there is a kind of scarcity. We believe that in the global sukuk market now there is more demand than supply," he told Reuters.

However, HSBC Amanah is likely to face competition from other major financial institutions that have crafted Islamic papers, including CIMB Group, Standard Chartered plc, Aseambankers Malaysia Bhd and Dubai Islamic banks.

Commenting on the sukuk deal, Yakub said HSBC Amanah officials have visited Indonesia’s Ministry of Finance several times and have been holding dialogues with them for over five years.

"We have people on the ground. They are supported by the regional centre in Malaysia and the capital markets team in Dubai. "It also involves the debt capital market team from across the bank," Yakub said.

Indonesia's Parliament last Tuesday passed a new Islamic banking bill into law in a bid to tap into the potential of the Islamic finance sector. Indonesia is the world's most populous Muslim nation. The Shariah banking law allows foreigners to establish Shariah banks in partnership with Indonesian citizens or local entities.

It also offers commercial banks the option of converting their business into Shariah-compliant banks, Reuters reported.

At present, HSBC is the only foreign bank which has Shariah operations in Indonesia, but there are several domestic banks with Shariah-compliant operations that are anticipating a growing domestic market to draw investments from oil-rich Middle East countries.

Three local Indonesian banks — state-owned PT Bank Rakyat Indonesia (BRI), PT Bank Bukopin and PT Bank Negara Indonesia Tbk (BNI) — plan to open Shariah-compliant units this year. Bahrain-based Islamic lender Albaraka Banking Group (ABG) has also opened an office in Indonesia. (The Malaysian Reserve, Page 1, June 30, 2008)

Indonesia's governance for Islamic banking

An Indonesian central banker brought a group of students and industry practitioners up to speed on the neighbouring republic's governance in Islamic bank.

Nasirwan Ilyas, a senior bank reseacher at Bank Indonesia's Directorate of Islamic Banking, was the guest speaker at International Centre for Education in Islamic Finance (INCEIF) discourse series today.

Two quick pointers for observers. First, Indonesia's central bank reports directly to the nation's Parliament, unlike Bank Negara Malaysia whose line of authority goes through the Ministry of Finance. Second, Indonesia's National Shariah Board, a unit of the Indonesia Ulema Council, is detached from the country's power bases. It is independent, unlike the national Shariah committees at BNM and Securities Commission (SC).

Pak Nasir's presentation was followed by a panel discussion by Securities Commission managing director Dato Dr Nik Ramlah Nik Mahmood, CIMB Islamic Bank Bhd CEO Badlishah Abd Ghani and Islamic Financial Services Board (IFSB) project manager Madzlan Mohamad Hussain. The session was moderated by Prof Dr Syed Abdul Hamid AlJunid, who heads INCEIF's Economics & Governance Department.

Writers wanted Islamic capital markets book

The Securities Commission of Malaysia plans to publish a six-part book series on the Islamic Capital Markets.
It is now int he process of recruiting writers for the first title in the series i.e. Islamic Capital Markets Part 1: Sukuk, according to a statement on the SIDC website. Deadline: June 30.
Overall, the series will cover key subjects like sukuk, equities, structured products, risk management & derivatives products, and regulatory framework. The book series, which is to be launched in 2009, is designed to serve as comprehensive and practical sources of reference to the industry, the legal, regulatory and academic fraternity.

Jobs galore in the Gulf

The Middle East is attracting finance talent, especially in Islamic finance, like a super-powered magnate. Just the other day, one Malaysian bode farewell to his colleagues and took off for Qatar.
He didn't want to tell his exact location - giving the usual 'I'll drop you guys an email soon' reply - but you can guess.
Among others, newly established Al Khaliji is expanding its banking business, with regional ambitions. They are hiring. A check on thei website listed 37 vacancies.
So are many others. Islamic investment company GULF CONNEXIONS, for example, is on the lookout for a Chief Investment Officer. Based in Bahrain, the CIO should have at least 10 years experience in investment banking, at least three of those years as an investment director in an Islamic investment bank in the GCC, so says their advertisement.
Another firm, advertised at MRL Financial, is looking for a head of its Islamic banking's wealth management business.
The list just goes on and on. Interesting time for seekers powered by Islamic finance knowledge.

Coping with the challenges of relocating

In a question sent to The Malaysian Reserve, a local banker is giving serious thought to an offer from a Middle Eastern Islamic bank.

The remuneration, the banker says, is fabulous, many times his package at present. However, he would like to know what other key issues should be considered before taking the leap.

We posed this question to Kuala Lumpur-based HSBC Amanah managing director Yakub Bobat (picture). This is his take on the subject:

"It depends on this individual's objectives. He seems to have taken care, very nicely, of the obvious financial matters. From my personal experince, having moved from the UK, then to Indonesia, Dubai and now Malaysia, the elements of relocating your entire family and infrastructure, are things that you have to be very cognisant about.

"You are away from the family and you are moving into a brand new environment. Here, the culture, lifestyle and people may perhaps be somewhat different.

"One of the biggest challenge is to settle yourself and your family into the new environment. Its easier for the person working. You are busy at work. It's the family that would need support to blend into the new enviroment.

"Financials aside, the ability to integrate into the new society, the new culture, is the challenge he or she should be very much aware of. Try to learn more about the new place and lifestyle. Speak to people who have lived there. That way, the integration process becomes so much easier."

(By Habhajan Singh, The Malaysian Reserve, June 16, 2008)

Inceif launches Masters in Islamic Finance

By Habhajan Singh

The International Centre for Education in Islamic Finance (Inceif) recently launched its Masters in Islamic Finance, marking another major milestone following the launch of its PhD in Islamic Finance last year.

Inceif, established with an endowment from Bank Negara Malaysia (BNM), had also recently forged a collaboration with the United Kingdom's University of Reading for an Islamic finance course.

Inceif already holds the distinction of being the only global university dedicated to Islamic finance, offering its flagship programme, the Chartered Islamic Finance Professional (CIFP) and PhD in Islamic Finance.Inceif is offering two masters programmes, the Masters in Islamic Finance by Research and the Masters in Islamic Finance by Coursework and Dissertation.

The Masters in Islamic Finance by Research is aimed at candidates with experience in the financial services industry, whose pursuit of the degree will lead to the creation of new products, development of new structures and resolution of outstanding problems.

The Masters in Islamic Finance by Coursework and Dissertation, on the other hand, is designed to produce graduates with in-depth exposure to various components of coursework in Islamic finance, before they are allowed to conduct their research.

The research output is intended to expand the horizon for new products or services in the Islamic financial services industry.In a statement, Inceif said the programme is supported by faculty members including Inceif's Prof Dr Hamzah Ismail (Head of Graduate Studies), Prof Datuk Dr Syed Othman Alhabshi (Head of Takaful Department), Prof Dr Saiful Azhar Rosly (Head of Islamic Banking Department), Prof Dr Murat Cizakca (Professor of Comparative Economic History), Prof Dr Syed Abdul Hamid AlJunid (Head of Islamic Financial Market Department) and Prof Dr Zainal Azam Abdul Rahman (Head of Shariah Department).

On May 5, Inceif had a preview of the programme, handled by Prof Hamzah Ismail who heads its Department of Graduate Studies.

The launch on June 12, was officiated by Higher Education Minister Datuk Seri Mohamed Khaled Nordin. Also present was BNM governor Tan Sri Dr Zeti Akhtar Aziz and Inceif governing council chairman Dr Rozali Mohamed.In August this year, the University of Reading will launch its Master of Science (MSc) in Investment Banking and Islamic Finance, where part of the courses would be from Inceif's CIFP Part I.

Students will also be expected to spend one term at the Inceif campus in Kuala Lumpur.Students who complete the Inceif component courses successfully can apply for exemptions from the CIFP Part 1 modules in addition to the Masters degree awarded by the University of Reading.

This is a first for Inceif and Reading and indeed, in the world, as students will be taught by faculties from the two universities.

(The Malaysian Reserve, June 16, 2008)

Qatar scholarship for Islamic finance

Interested to study Islamic finance in Qatar?

The Qatar Faculty of Islamic Studies is offering scholarships for Islamic finance related programmes for academic year 2008/9.

In advertisements ran in a local daily, the faculty invited scholar applicants for MSc in Islamic Finance, Diploma in Islamic Studies and Master in Islamic Studies with a specialization in contemporary Fiqh.
Master in Islamic Studies, with emphasis on fiqh, will commence in Sept 2008. Its cour courses are contemporary studies in Qur’an and hadith, atlas of modern Islamic thought, human rights and women, and, studies in Islamic aqeedah. Its elective courses are as follows: Texts in Fiqh and Jurisprudence, civil Law and penal law, Islamic financial institutions, modern trends in legal thought, juristic biological issues, and issues in Islamic jurisprudence.

Zaid Ibrahim goes to Dubai

Zaid Ibrahim & Co, the largest law firm in Malaysia, has received approval from the Dubai Financial Services Authority to provide legal services to local, regional and international clients in and from the Dubai International Financial Centre (DIFC), it announced in a press release today.
It claims to be the the first Asian law firm to have received the approval.
The statement added that its Dubai office, to commence operations mid July 2008, will be headed by Senior Associate Farid Hussein and supported by the firm's Arabic speaking lawyers from the Islamic Banking practice.
The law firm is helmed by Nik Norzrul Thani.

Islamic banks getting bigger

Soon, the name Ummar Bank will be a familiar name, if it sticks.

That's the tentative name given to a proposed superbank to be based in Bahrain. A group of Gulf banks and investors plan to raise US$9 billion by selling shares in a planned Islamic investment bank which will tap the rising liquidity in Muslim nations, a senior banker said on June 2.

The bank, tentatively named Ummar Bank, will have a paid-up capital of $11 billion, of which $2 billion will be raised in private equity placement, Shaikh Saleh Kamel said, according to a report on Middle-East-Online.Com.

The new Bahrain-based Islamic investment bank is seeking to raise as much as $11 billion to start projects in all Muslim countries, Shaikh Saleh, the Saudi entrepreneur, said on Al-Arabia television on June 3, reported Bloomberg.

Shaikh Saleh is chairman of the Albaraka Banking Group.

HK, Dubai collaborate on Shariah-compliant products

Hong Kong and Dubai financial centres are forging ahead in their tie-ups, the latest being a venture to develop Shariah-compliant financial products.

On May 20, the Hong Kong Monetary Authority (HKMA) and the Dubai International Financial Centre (DIFC) Authority signed a memorandum of understanding (MOU) to foster "co-operation in the development of Shariah-compliant financial products and the financial infrastructures in their respective jurisdictions".

The MOU sets out the framework agreed between the two authorities to cooperate, communicate and share information on a number of areas, including the development of Islamic finance in the DIFC and Hong Kong, the exchange of advice on the development of legal and regulatory frameworks and the "harmonisation" of standards.

Hong Kong and Singapore are two Asian international financial centres that have turned their attention to the Islamic financial market, estimated to be worth US$1 trillion (RM3.24 trillion) globally and is expected to grow by 15% a year.

In November 2007, Hong Kong's financial secretary John Tsang said it is planning to develop an Islamic bond market to tap Middle Eastern and other Islamic investors eying opportunities in China. At its end, Malaysia which is home to a number of Islamic banks and takaful operators, has floated the concept of Malaysia International Islamic Financial Centre (MIFC).

The HKMA and DIFC Authority MOU also sets out to promote training and educational programmes and the facilitation of dialogue with Shariah boards and scholars.

The two regulators are also looking at exploring ways to foster Islamic financial activities on a cross-border scale to trade sukuk and other Shariah compliant financial instruments, develop payment systems and forge technical co-operation and linkages between each party's financial infrastructure developments.

"I am confident that the MOU will enhance the co-operation between the HKMA and the DIFC Authority, particularly in the development of Islamic finance, which in turn will benefit Hong Kong as an international financial centre," said Eddie Yue, deputy CEO of HKMA in a statement.

DIFC Authority CEO Nasser Al Shaali said the tie-up will enable the regulator to find solutions for critical issues by promoting shared expertise and consultation with industry.

In January, Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz had led a Malaysian delegation to Hong Kong to expand cooperation on Islamic finance.

In March 2007, the central bank signed a MOU with the Qatar Financial Centre Regulatory Authority (QCFRA) and Dubai Financial Services Authority (DFSA) for collaboration on the Islamic finance front.

(By Habhajan Singh, THE MALAYSIAN RESERVE, June 2, 2008)