Syed Moheeb leaves Takaful Ikhlas after 10 years

by Habhajan Singh

Datuk Syed Moheeb Syed Kamarulzaman (picture) will be leaving Takaful Ikhlas Sdn Bhd after building up the homegrown takaful outfit from the ground up to become the nation’s third-largest takaful operator in terms of gross return contribution.

Syed Moheeb, who had stints with local and international insurers spanning 38 years, has submitted his resignation. “I’ve been postponing my retirement for some time now,” he told The Malaysian Reserve when contacted to confirm his resignation as Takaful Ikhlas’ president and chief executive officer (CEO).

Syed Moheeb was brought in by the senior management of MNRB Holdings Bhd to start its whollyowned takaful unit which was incorporated in September 2002. “We’ve built up a trusted brand. We’ve introduced many new innovations,” he said in a brief telephone conversation.

In Malaysia’s takaful sector, total assets of takaful funds increased by 15.8% to RM17 billion as at end-2011, according to Bank Negara Malaysia statistics. Total takaful contributions accounted for 13% of total premiums and contributions in the insurance and takaful industry, up from 12.4% in 2010.

Syed Moheeb began his insurance career at UK-based Royal Insurance Sdn Bhd before joining US-owned Aetna Insurance where he headed the general insurance division. He then moved on to head DRB-Hicom Group’s insurance unit then known as South-East Asia Insurance Sdn Bhd. His next port of call was as CEO of Germanbased Gerling Reinsurance.

Asked about his next move, Syed Moheeb said he would like to ‘continue contributing’ his experience to the industry.

[THE MALAYSIAN RESERVE, 7 AUG 2012]

Zuraidah breaks into ‘Million Dollar’ club

By Habhajan Singh

Zuraidah Hanim Ibrahim (picture) made history when she emerged as the first lady agent from Takaful Ikhlas Sdn Bhd to break into the Million Dollar Round Table (MDRT) ranks.

With a personal production of family takaful for the first year contribution of RM461,000, Zuraidah was able to make it for MDRT 2011, along with 7,000 other insurance and takaful agents from around the world.

She was one of the 2,400 first-time agents who set foot at the gala event in Atlanta, US. What made it sweeter for Zuraidah is that her husband is also an MDRT alumni. Samsul Bardari Abdullah represented Takaful Ikhlas at the MDRT 2005. Back then, you needed a minimum premium of RM260,000 to qualify. For 2011, the qualifying mark was RM420,000.

She now join the ranks of some 36,000 life insurers and financial services professionals from more than 430 companies in 78 countries. MDRT members demonstrate exceptional professional knowledge, strict ethical conduct and outstanding client service, according to information on its website.

Zuraidah runs her financial consultancy via Subang Jaya-based Darul Asiah Consultant Sdn Bhd. She now has about 1,500 policyholders. “Word of mouth and referrals, that’s how I operate. I rarely make cold calls,” she says. “I hardly call strangers. I started by approaching family members and friends. They then they gave me referrals. Strangers are tough.”

Recalling her early days in the industry, she introduced herself as a financial consultant.? “I usually start by offering basic financial planing and will writing. They’re more receptive towards that,” she says.

So, what did she pick up at the annual MDRT gathering? “It was an opportunity to learn from successful people. It is always great to be in the company of go getters,” she says.

The MDRT annual meeting is also designed to expose participants to innovative sales ideas in the life insurance-based, financial services business. It offers about 100 speakers during its sales ideas breakfast sessions, motivational main platform presentations, educational afternoon sessions, and what it badges as insightful evening sessions.

Zuraidah, a certified financial planner, is ready for new challenges. She has identified one pocket of opportunity. She sees a huge untapped market amongst the high-income people.

“Sometimes, they are so busy that they overlook their own insurance needs,” she says.

(The Malaysian Reserve, 23 July 2012)

Malaysian politics is based on race, says Dr Mahathir

By Joseph Masilamany

The greater interests of the nation can be neglected in a country where politics is based on race.

“In other countries, politics is based on ideologies. For us, ideologies are irrelevant. Our politics is about race and all our political parties are racist in nature. In our country, we are more racist than before. This is the reality that we must accept,” former Prime Minister Tun Dr Mahathir Mohamad said in Kuala Lumpur yesterday.

Speaking at the “Politics and Business: The Malaysian Connection” forum organised by Affin Investment Bank Bhd, he said the next general election would be based on race, adding that it was “about who gets what, based on race.”

National University of Singapore assistant Prof Dr Reuben Wong, who also spoke at the forum, said that Europe will face "difficult times ahead, but things will change."

“A lasting solution will take two years to work out in the euro-area. But don’t underestimate the euro’s resolve,” he said.

Both speakers joined Monash University (Sunway Campus) professor of political science and head of school of arts and social science Prof Dr Chin and Affin Investment Bank Bhd research head Andy Ong in a panel discussion moderated by The Malaysian Reserve executive editor Habhajan Singh.

(The Malaysian Reserve, 29 June 2012)

CAPTION FOR PHOTO: (From left) Ong, Prof Dr Wong, Dr Mahathir, Prof Dr Chin and Habhajan at the forum organised by Affin Investment Bank in Kuala Lumpur (pic: Hafzi Mohamed)

SAC revises Shariah screening methodology

By Farah Saad

The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) has adopted a revised screening methodology to determine the Shariah-compliant status of listed companies.

Consisting of Shariah scholars, jurists and market practitioners, the council is responsible for ascertaining and issuing rulings on the application of Shariah principles on matters pertaining to the Islamic capital market (ICM).

“In view of the developments and growing sophistication of the Islamic finance industry since the introduction of the current screening methodology in 1995, the SAC has revised the methodology by adopting a two-tier quantitative approach which applies the business activity benchmarks and the newlyintroduced financial ratio benchmarks,” said the SC in a recent statement.

The outcome of the revised methodology will be reflected in the list of Shariah-compliant securities by the SAC effective November 2013. In addition to the above two-tier quantitative assessment, the existing qualitative assessment will continue to be applicable while the release of the list of Shariahcompliant securities will remain twice a year.

“The revision to the screening methodology will further facilitate the orderly development of the Islamic equity market and fund management industry at both domestic and international levels, in line with the growth strategies outlined under the Capital Market Masterplan 2,” said SC ICM executive director Zainal Izlan Zainal Abidin.

The SC will engage with relevant stakeholders and a set of frequently asked questions, will be determined in respect of details and operationalisation of the revised methodology, it said.

(The Malaysian Reserve, 25 June 2012)

Consolidation of Islamic finance ‘a matter of time’

By Farah Saad

It is only ‘a matter of time’ before Malaysia sees the consolidation of its Islamic finance institutions as Islamic banking becomes more varied and accessible, and the need for halal financing in large amounts becomes more apparent.

Malaysia now has 16 locally incorporated Islamic banks, five of which are international banks, according to Bank Negara Malaysia (BNM) statistics.??Smaller banks need to consolidate in order to go head-to-head with bigger banks, and to enable them to provide large financing, according to some industry executives.

“Consolidation has to happen. There are too many small players, and so there is no scale. When you don’t have scale, you cannot do large financing. So, it is is only a matter of time,” HSBC Amanah Bhd chief executive officer Rafe Haneef told The Malaysian Reserve in a recent interview.

Among the outfits that make up the list are Affin Islamic Bank Bhd, Al-Rajhi Banking & Investment Corp (M) Bhd, CIMB Islamic Bank Bhd, Kuwait Finance House (Malaysia) Bhd, OCBC Al-Amin Bank Bhd and Standard Chartered Saadiq Bhd.

BNM, which regulates financial institutions including Islamic banks, has also licensed another five, which it calls the International Islamic banks, including Alkhair International Islamic Bank Bhd (formerly known as Unicorn International Islamic Bank Bhd) and PT Bank Syariah Muamalat Indonesia, Tbk.

In a recent comment, Thomson Reuters global head Islamic finance and Organisation of Islamic Cooperation countries, Rushdi Siddiqui, wrote that size is often the justification for achieving economies of scale, used to access deals for league table prominence, used as a buffer in a challenging environment, and used as defensive measure to ward off unwanted suitors.

There are hundreds of Islamic banks and funds, but the paid up capital and assets under management is too small to be meaningful, he said.

(The Malaysian Reserve, 09 April 2012)

Experts: Islamic funds more resilient during financial crisis

By Sathish Govind



The financial crisis has proven the Islamic fund management industry to be far more resilient and much safer for investors then its conventional counterpart due to the lack of exposure to conventional banks, director of Amanie Advisors Sdn Bhd, a leading firm specialising in Islamic Solutions, Baiza Bain told The Malaysian Reserve recently.??



“As a result during the global financial crisis, almost all Islamic funds outperformed their conventional counterpart which in itself is proof of its sound investment practice,” Baiza said.??He added that the crisis thus has attracted more Muslims and non-Muslims into the industry which now understand the hazards of the conventional financial system.??


Chief executive officer and executive director of Asian Islamic Management Sdn Bhd, Akmal Hassan agrees and adds that there is sufficient proof that Islamic fund management had shown to be far more resilient especially during the financial crisis.??


“As an example, the fund size of Hwang AIIMAN Growth Fund (AGF), a fund launched by Hwang Investment Management Bhd has grown from RM36.128 million in the year 2007 to RM88.32 million as at Jan 31, 2012” “AGF has been consistent in declaring income distributions since its inception on October 2002 and has also proven to be a sound option for investors seeking capital growth and those who have remained since inception have seen capital growth of 244.63%,” Akmal said.??

Akmal further adds that there will be exponential growth in the sector especially in the next few years due to an increasing number of high net growth individuals around the world and growing interest from developing and emerging economies.??

“Countries such a as Japan, South Korea, Brunei, Indonesia, Australia, Singapore are countries that are looking to expand their offerings, create more value and push for greater transparency from Islamic sources, he added.??


At present globally, the Islamic fund management assets represent 4.5% of the total Islamic finance assets. The total estimated assets under management is US$60 billion (RM183 billion). Rate of the industry growth for the past decade has been estimated at 15% per annum.??Enumerating some of the differences and advantages of Islamic fund management compared to the conventional system, Akmal said the Shariah-compliant investments allow for profit sharing through prearranged agreement in sharing risk and returns and prohibits the payment or acceptance of interest fees.??Akmal added that Islamic fund management offers greater transparency, lower risks to promote stability and meets the ethical and faith based needs??


On some of the challenges facing the industry, Baiza said that for the industry to grow at a faster rate there is a need of standardisation of the Islamic fund management industry on a global scale as it is now fragmented and focused on a few countries.??


On some of the trends in the industry, Akmal said that he foresees more Islamic investment players entering the local market as it is gaining reputation as an Islamic financial hub in the Asean region.??He added this will translate into more diverse and sophisticated Shariah-compliant funds being developed here and exported to the Middle East and emerging regions due to the growing affluence of these nations that calls for better need for wealth management of product and services.??

The Securities Commission (SC) had said that under the Capital Masterplan 2, the size of the Malaysian Islamic capital market is projected to expand at an average 10.6% per annum over the next 10 years to RM2.9 trillion by 2020.??The SC added that 2011 continued to be a good year for the Islamic capital market globally, especially the sukuk segment. The total value of sukuk issued globally in 2011 amounted to US$92 billion, representing a 68% increase, year-on-year.??



Malaysia remains at the forefront of the sukuk market, accounting for 73% or US$67 billion of the total sukuk issued.??Malaysia is also the domicile for 68% of the US$210 billion total sukuk outstanding globally as at end-2011.



(The Malaysian Reserve, 19 March 2012)

StanChart Saadiq sees Islamic banking penetration up 3%

By Mohd Rashdan Jamaludin

Standard Chartered Group’s (StanChart) Islamic banking arm Standard Chartered Saadiq Bhd sees the penetration rate of Islamic banking in Malaysia to rise 3% to 25% this year, parallel to the global trend.

StanChart global head of Islamic banking Wasim Saifi said Islamic banking is growing rapidly in the international financial markets, and the bank sees the same applies in Malaysia. Without disclosing specifics, Wasim said there are several push factors, among which include the perception that Islamic banking has gotten sophisticated by well-discerned banking customers. He added that Islamic banking has become simpler and widely accessible.

“Islamic banking also projects stability to both Muslims and non-Muslims alike,” he said. “We see ample opportunities to help our customers and potential customers worldwide do the switch from conventional banking. The fact that Islamic banking asset represents only 1% of the global conventional banking’s, there is vast growth potential, especially with over one billion Muslims worldwide,” he told The Malaysian Reserve in a recent interview.

Indonesia, for example, has the most Muslim population and yet, its Islamic banking penetration rate was still 3%, he said, quoting Pakistan as another populous Muslim nation with only 9% patronising Islamic finance. “We will definitely see growth momentum in the next two to three years,” said Wasim, adding that the StanChart Saadiq is looking to spread its wings to the African continent.

For Malaysia, StanChart sees the progress made in policy framework, comprehensive regulations and product diversification has encouraged the acceptance of and switch to Islamic banking locally. To meet the increasing demand, StanChart is looking at opening up more Saadiq branches, with eight in sight in the near term.

According to its website, StanChart claimed to be the first international bank in Malaysia to offer Islamic banking products in 1992, with its Saadiq arm officially launched in 2008. StanChart has footprints in over 70 countries.

(The Malaysian Reserve, 09 January 2012)

Saturna targets RM31.3b fund with M’sia as its finance hub

[A BLASTY FROM THE RECENT PAST]

By Farah Saad

With Malaysia chosen as its global Islamic finance hub, US-based Islamic investment management company Saturna Capital Corp plans to raise a fund of US$10 billion (about RM31.3 billion) by 2015 via its local unit Saturna Sdn Bhd.
This is more than twice the size of the US$3.5 billion it has right now, but Saturna believes that given the current economic climate, the target is achievable.



Saturna Sdn Bhd director of Islamic Investing and deputy portfolio manager Monem Salam sees a shift in direction of the world’s funds, with capital moving away from the more traditional markets of the Middle East, the US and Europe, to a fast-growing Asia, and Malaysia will be in the middle of it all.



“The problems that are happening in the West right now are all systemic, they are not going to be resolved overnight. With Europe and the US having problems, the Middle East being too volatile, the only place for the money to flow to is Asia,” he told The Malaysian Reserve.



In 2003, Saturna group’s fund size stood at US$40 million, in 2008 that figure bloomed to US$1.4 billion, and as for 2011, the fund size stands at US$3.5 billion.

 Salam said Saturna chose Malaysia to be its global Islamic finance hub because of its experience in Islamic finance, its available manpower, and the government’s support in the form of initiatives.



Malaysia’s location and close proximity to other countries in the Asia-Pacific region also made it an attractive location, he added.

Salam also said he is just as excited about Indonesia’s prospects as well, and has singled out the country as South-East Asia’s economy to watch.



“Population-wise, it is roughly the same size as the US. Then you take into consideration a growing middle class, as well as the growing number of people moving up from middle to upper-middle, and upper-middle to wealthy. That is a huge, huge market,” said Salam.

 Saturna recently secured a mandate from an Australian company, which will be managed from its offices in Kuala Lumpur.

Saturna Capital, established in Bellingham, Washington, in 1989, claims to be the world’s second oldest Shariah income fund.



In 2010, the company bought Alpha Asset Management Sdn Bhd, and within two months converted all its investments to Islamic funds, while retaining its mainly non-Muslim clientele.

In June 2010, the company was granted an Islamic fund management licence by the Securities Commission.
 


“The way that Saturna is run is a little different. Normally you would have conventional funds, run them through an Islamic filter to remove all the ‘sin stocks’ to get the Shariah-compliant fund, but what we do is that research is done first on an Islamic basis, then we build the fund from the bottom up. So far, the returns are proven, and Islamic funds have consistently outperformed conventional ones,” said Salam.



Islamic finance has grown by leaps and bounds over the past few years. Prior to 2008, Islamic finance was merely “an interesting thought”.

 “Now the challenge becomes growing assets and going up the economic ladder,” he said.



Islamic finance has expanded so much, that more often than not, there are new funds being launched promising innovation.



“The industry tends to focus on ‘what’s new’, so you get all these new products in the market when what the client really wants is a simple investment product that works,” Salam said.

(The Malaysian Reserve, 04 December 2011)