Khazanah Nasional Bhd has invested US$150 million (RM525 million) for a 25% stake in a the newly-formed Islamic investment firm, Fajr Capital Ltd, which will also be jointly owned by the sovereign investment bodies of Abu Dhabi and Brunei and a Saudi-based private firm.
Khazanah said Fajr Capital has raised US$588 million after the first round of funding from its shareholders and will focus on providing Shariah-compliant financial services and complementary opportunities in major Muslim regions.
The investment firm, to be based in the Dubai Financial Centre with offices in Kuala Lumpur and London, will be an active and enabling investor in its portfolio of companies with the aim of helping to optimise performance through best-in-class products, service standards, technologies and Shariah expertise.
The move by Khazanah to participate in the Islamic investment firm signals a recent rise in the joint establishment of investment funds by Malaysia and countries in the Middle East.
Last week, the government announced it was setting up a US$2.5 billion fund with Saudi Arabia's PetroSaudi International Ltd while Minister of International Trade and Industry Datuk Mustapa Mohamed yesterday said efforts were underway by Khazanah and the Qatar Investment Authority to set up a US$1 billion joint investment fund.
For Fajr Capital, Khazanah's partners in the investment firm are the Abu Dhabi Investment Council, Brunei Investment Agency and Saudi-based The Mohammad & Abdullah Al Subeaei Investment Co (MASIC). Khazanah's managing director Tan Sri Azman Mokhtar said the venture into Fajr Capital would provide cross linkages between Malaysia and key Muslim markets and lay the foundation for a stronger economic cooperation.
"Islamic financial services is a key priority for Malaysia, and Khazanah's participation in Fajr Capital reflects our commitment to this area.
"This partnership also embodies Malaysia's deepening links with the Middle East and broader Muslim world — regions that are important sources of capital and attractive markets for us to invest in," he said in a statement yesterday.
Azman is a member of Fajr Capital's board of directors, which is chaired by Sheikh Ebrahim Khalifa Al-Khalifa, who is the chairman of the accounting and auditing organisation for Islamic Financial Institutions.
Khazanah said Iqbal Khan, formerly the founding chief executive of HSBC Amanah, has been appointed as CEO of the investment firm.
Other senior members in the company's management team include former BIMB Holdings Bhd CEO Datuk Noor Azman Aziz, while management team members include former executives at HSBC Amanah, Citigroup and ABN Amro.
"The global crisis has highlighted the need for an ethical and community-based approach to investment.
The Islamic financial services indust ry i s st rategical ly positioned to fulfill this need in our target markets.
"We see these markets as our home and wish to work with local partners and indigenous management to grow our portfolio companies and to increase the overall market share for Islamic financial services," Iqbal said in separate statement by Fajr Capital yesterday.
(This story appeared in The Malaysian Reserve on Oct 7, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)
Monday, October 12, 2009
CERT to hold Islamic Finance Forum 2009 next month
The Centre for Research and Training (CERT) is collaborating with the Malaysian Takaful Association, Messrs Hisham, Sobri & Kadir and the International Institute of Islamic Finance to host the 6th Kuala Lumpur Islamic Finance Forum (KLIFF) 2009 from Nov 2-6.
KLIFF 2009 aimed to be bigger and better with more participation from local, regional and international speakers and delegates with special interest in Islamic banking and finance. Various events will also be held in conjunction with KLIFF 2009 including the 5th International Convention on Takaful & Retakaful, the 4th KLIFF Shariah Forum and the KLIFF Awards, CERT said in a statement.
Prime Minister Datuk Seri Mohd Najib Razak is expected to officiate the forum. Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop is scheduled to officiate the Islamic Finance Awards while Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah will launch the Shariah Forum.
CERT said KLIFF 2009 is expected to gather a pool of industry experts to share their views and experiences in developing Islamic banking and finance around the globe.
Some 20 distinguished speakers will make their presentations such as Sheikh Nizam Yaquby of Bahrain, A Rushdi Siddiqui (Global Director, Islamic Finance Thomson Reuters), Dr Aznan Hasan (Shariah Advisor, Bank Negara Malaysia) and Dr Mohd Daud Bakar who is CEO of International Institute of Islamic Finance.
(The Malaysian Reserve, Oct 7, 2007)
KLIFF 2009 aimed to be bigger and better with more participation from local, regional and international speakers and delegates with special interest in Islamic banking and finance. Various events will also be held in conjunction with KLIFF 2009 including the 5th International Convention on Takaful & Retakaful, the 4th KLIFF Shariah Forum and the KLIFF Awards, CERT said in a statement.
Prime Minister Datuk Seri Mohd Najib Razak is expected to officiate the forum. Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop is scheduled to officiate the Islamic Finance Awards while Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah will launch the Shariah Forum.
CERT said KLIFF 2009 is expected to gather a pool of industry experts to share their views and experiences in developing Islamic banking and finance around the globe.
Some 20 distinguished speakers will make their presentations such as Sheikh Nizam Yaquby of Bahrain, A Rushdi Siddiqui (Global Director, Islamic Finance Thomson Reuters), Dr Aznan Hasan (Shariah Advisor, Bank Negara Malaysia) and Dr Mohd Daud Bakar who is CEO of International Institute of Islamic Finance.
(The Malaysian Reserve, Oct 7, 2007)
Khazanah, QIA to form joint investment fund
DOHA • Efforts are underway by Khazanah Nasional Bhd and the Qatar Investment Authority (QIA) to establish a joint investment fund, International Trade and Industry Minister Datuk Mustapa Mohamed said yesterday.
He disclosed that Khazanah officials were already in talks with their counterparts in Qatar and more follow-up meetings have been suggested.
"I hope Khazanah will draw up several strategies and recommendation for the further perusal with Qatar authorities. "What's certain is Qatar is very keen to invest in Malaysia.
They need concrete proposals from Malaysia and we are confident Khazanah Nasional and others are drawing up definite proposals for the consideration of the QIA," he said.
It was reported in January that Tun Abdullah Ahmad Badawi, who was then Prime Minister, on a visit to Qatar, had had indepth discussions on the establishment of a US$1 billion (RM3.43 billion) investment fund by both countries.
Datuk Seri Dr Rais Yatim, who was then Foreign Minister, was reported to have said that the fund has been agreed upon at the policy level. The aim of the fund is to get both countries to plough capital in certain investments, either in Malaysia or Qatar. Investments from Qatar in Malaysia, at present, include a 70% equity in Asian Finance Bank and a 49% stake in Pavilion Mall in Bukit Bintang, Kuala Lumpur. Mustapa is leading a weeklong trade and investment promotion mission to Qatar, Egypt and Saudi Arabia. After Doha, the delegation will depart for Cairo before making a stop-over in Jeddah and Riyadh.
In Doha, the Malaysia-Qatar Joint Trade Committee held its inaugural meeting on Monday, focusing on efforts towards enhancing trade and economic ties.
The meeting was jointly chaired by Mustapa and Qatari Acting Minister of Business and Trade and Minister of State for International Cooperation Dr Khalid Bin Muhammad Al Attiyah. — Bernama (Oct 6, 2009)
He disclosed that Khazanah officials were already in talks with their counterparts in Qatar and more follow-up meetings have been suggested.
"I hope Khazanah will draw up several strategies and recommendation for the further perusal with Qatar authorities. "What's certain is Qatar is very keen to invest in Malaysia.
They need concrete proposals from Malaysia and we are confident Khazanah Nasional and others are drawing up definite proposals for the consideration of the QIA," he said.
It was reported in January that Tun Abdullah Ahmad Badawi, who was then Prime Minister, on a visit to Qatar, had had indepth discussions on the establishment of a US$1 billion (RM3.43 billion) investment fund by both countries.
Datuk Seri Dr Rais Yatim, who was then Foreign Minister, was reported to have said that the fund has been agreed upon at the policy level. The aim of the fund is to get both countries to plough capital in certain investments, either in Malaysia or Qatar. Investments from Qatar in Malaysia, at present, include a 70% equity in Asian Finance Bank and a 49% stake in Pavilion Mall in Bukit Bintang, Kuala Lumpur. Mustapa is leading a weeklong trade and investment promotion mission to Qatar, Egypt and Saudi Arabia. After Doha, the delegation will depart for Cairo before making a stop-over in Jeddah and Riyadh.
In Doha, the Malaysia-Qatar Joint Trade Committee held its inaugural meeting on Monday, focusing on efforts towards enhancing trade and economic ties.
The meeting was jointly chaired by Mustapa and Qatari Acting Minister of Business and Trade and Minister of State for International Cooperation Dr Khalid Bin Muhammad Al Attiyah. — Bernama (Oct 6, 2009)
Bursa Malaysia may launch bonds trading platform
Bursa Malaysia said yesterday it plans to launch a secondary trading platform for bonds, including Islamic papers, to spur retail interest in its debt market.
Malaysia's bond market is dominated by the state pension fund and insurers, and Islamic bonds in particular are rarely traded, with limited supply prompting investors to hold their paper until maturity.
The country has the thirdlargest bond market in Asia ex-Japan after China and Korea, and traders estimate daily trading volumes average about RM2.35 billion.
Bursa Malaysia's secondary bond trading platform would boost transparency and meet demand from retail investors, said the bourse's global head of Islamic capital markets Raja Teh Maimunah Raja Abdul Aziz.
"The only way to bring retailers on would be through the exchange," she said in an interview.
"The over-the-counter market is not transparent in terms of pricing so you cannot get the retailers to come on.
"We have to have a bear and bull model. Fixed income is a defensive investment." She said retail investors now invest in bonds through unit trust funds but some players want direct access to the market, which would allow them to make their own investment selections.
The bourse is doing research and development on the platform, she said, but did not give a target date for its rollout. Head of fixed income research at CIMB Bank Lum Choong Kuan said a trading platform could tackle the problem of illiquidity.
"If there's more liquidity, you will see people issuing more Islamic bonds and the buy-and-hold mentality may not be a hindrance to market liquidity," he said.
Globally, the secondary Islamic bond market has seen thin trading volumes, due partly to theological differences on the extent to which Islam allows the sale of debt.
The Hanafi school of thought does not allow debt to be sold to third parties, but some schools sanction it under certain conditions, including that the price must be paid on the spot and that the sale must not lead to interest. — Reuters (Oct 6, 2009)
Malaysia's bond market is dominated by the state pension fund and insurers, and Islamic bonds in particular are rarely traded, with limited supply prompting investors to hold their paper until maturity.
The country has the thirdlargest bond market in Asia ex-Japan after China and Korea, and traders estimate daily trading volumes average about RM2.35 billion.
Bursa Malaysia's secondary bond trading platform would boost transparency and meet demand from retail investors, said the bourse's global head of Islamic capital markets Raja Teh Maimunah Raja Abdul Aziz.
"The only way to bring retailers on would be through the exchange," she said in an interview.
"The over-the-counter market is not transparent in terms of pricing so you cannot get the retailers to come on.
"We have to have a bear and bull model. Fixed income is a defensive investment." She said retail investors now invest in bonds through unit trust funds but some players want direct access to the market, which would allow them to make their own investment selections.
The bourse is doing research and development on the platform, she said, but did not give a target date for its rollout. Head of fixed income research at CIMB Bank Lum Choong Kuan said a trading platform could tackle the problem of illiquidity.
"If there's more liquidity, you will see people issuing more Islamic bonds and the buy-and-hold mentality may not be a hindrance to market liquidity," he said.
Globally, the secondary Islamic bond market has seen thin trading volumes, due partly to theological differences on the extent to which Islam allows the sale of debt.
The Hanafi school of thought does not allow debt to be sold to third parties, but some schools sanction it under certain conditions, including that the price must be paid on the spot and that the sale must not lead to interest. — Reuters (Oct 6, 2009)
Dubai Financial snubs Bank Islam’s share offer
By Alfean Hardy
BANK Islam Malaysia Bhd's plan to raise RM540 million from the sale of Islamic convertible redeemable non-cumulative preference shares (Islamic CRNCPS) to its shareholders hit a snag following the decision by Dubai Financial Group LLC not to take up the offer. Dubai Financial holds a 40% stake in the country's oldest Islamic bank.
BIMB Holdings Bhd holds a 51% majority stake while Lembaga Tabung Haji (Tabung Haji) holds the remaining 9%. Announced in April 2009, the exercise, which qualified as Tier-1 capital, would have allowed Bank Islam to strengthen its capital base and fund the expansion of its business.
Both BIMB and Tabung Haji have accepted the offer for their entitlements amounting to RM275.4 million and RM48.6 milllion respectively, raising the bank's total Tier-1 capital by an additional RM324 million.
In a statement yesterday, Bank Islam said Dubai Financial, which is part of the Dubai Group, had not taken up the offer to subscribe to its port ion of the Islamic CRNCPS amount ing to RM216 million.
It said it would now offer the firm's portion to BIMB and Tabung Haji on a pro-rated basis.
In a press statement late yesterday evening, Bank Islam said its major shareholder has made a commitment to subscribe to the 216 million CRNCPS rejected by Dubai Financial.
Meanwhile, in a seperate statement of its own, Dubai Group said that it was in the process of reviewing its strategic options relating to its stake in Bank Islam. "Bank Islam boasts strong attributes across the Asian banking sector, and the capital raise offer came in reflection of the successful transformation plan implemented by Bank Islam since 2006.
"However, following the reassessment of its investment strategy, Dubai Group has redirected its competitive advantage closer to home, namely the GCC and the greater Middle East region. Malaysia does remain a key market for future investments," it added.
According to Dow Jones and other reports, market speculation has been rife over the past year that Dubai Financial would sell its stake to Malayan Banking Bhd's Islamic banking subsidiary Maybank Islamic Bhd. Commenting on such speculation, Bank Islam, in its media release, said it would welcome any strategic partner who can add value to the bank's business and growth plans if and when Dubai Financial sells its stake.
However, Dubai Group has routinely dismissed such talk, stating that it remained a strategic long-term investor in Bank Islam. According to media reports in the Middle East, Dubai Group itself has been hard hit by the global financial crisis and has already cut 70% of its staff since last November.
The firm, which is owned by the ruler of Dubai, Sheikh Mohammed Rashid, via Dubai Holdings, has also indicated plans to reduce its holdings that included investments in firms like Egypt's Commercial International Bank and propery developer Mazaya Saudi.
There are also plans in the pipeline, according to the reports, of consolidating the back offices of Dubai Group and Dubai Investment Capital to reduce costs. The firm has already completed the merger of its property and business park assets into two new units.
(This story appeared in The Malaysian Reserve on Oct 2, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)
BANK Islam Malaysia Bhd's plan to raise RM540 million from the sale of Islamic convertible redeemable non-cumulative preference shares (Islamic CRNCPS) to its shareholders hit a snag following the decision by Dubai Financial Group LLC not to take up the offer. Dubai Financial holds a 40% stake in the country's oldest Islamic bank.
BIMB Holdings Bhd holds a 51% majority stake while Lembaga Tabung Haji (Tabung Haji) holds the remaining 9%. Announced in April 2009, the exercise, which qualified as Tier-1 capital, would have allowed Bank Islam to strengthen its capital base and fund the expansion of its business.
Both BIMB and Tabung Haji have accepted the offer for their entitlements amounting to RM275.4 million and RM48.6 milllion respectively, raising the bank's total Tier-1 capital by an additional RM324 million.
In a statement yesterday, Bank Islam said Dubai Financial, which is part of the Dubai Group, had not taken up the offer to subscribe to its port ion of the Islamic CRNCPS amount ing to RM216 million.
It said it would now offer the firm's portion to BIMB and Tabung Haji on a pro-rated basis.
In a press statement late yesterday evening, Bank Islam said its major shareholder has made a commitment to subscribe to the 216 million CRNCPS rejected by Dubai Financial.
Meanwhile, in a seperate statement of its own, Dubai Group said that it was in the process of reviewing its strategic options relating to its stake in Bank Islam. "Bank Islam boasts strong attributes across the Asian banking sector, and the capital raise offer came in reflection of the successful transformation plan implemented by Bank Islam since 2006.
"However, following the reassessment of its investment strategy, Dubai Group has redirected its competitive advantage closer to home, namely the GCC and the greater Middle East region. Malaysia does remain a key market for future investments," it added.
According to Dow Jones and other reports, market speculation has been rife over the past year that Dubai Financial would sell its stake to Malayan Banking Bhd's Islamic banking subsidiary Maybank Islamic Bhd. Commenting on such speculation, Bank Islam, in its media release, said it would welcome any strategic partner who can add value to the bank's business and growth plans if and when Dubai Financial sells its stake.
However, Dubai Group has routinely dismissed such talk, stating that it remained a strategic long-term investor in Bank Islam. According to media reports in the Middle East, Dubai Group itself has been hard hit by the global financial crisis and has already cut 70% of its staff since last November.
The firm, which is owned by the ruler of Dubai, Sheikh Mohammed Rashid, via Dubai Holdings, has also indicated plans to reduce its holdings that included investments in firms like Egypt's Commercial International Bank and propery developer Mazaya Saudi.
There are also plans in the pipeline, according to the reports, of consolidating the back offices of Dubai Group and Dubai Investment Capital to reduce costs. The firm has already completed the merger of its property and business park assets into two new units.
(This story appeared in The Malaysian Reserve on Oct 2, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)
Malaysia, Saudi Arabia to set up RM9b venture
Malaysia and Saudi Arabia are chartering a new era of economic cooperation with the setting up of a US$2.5 billion (RM8.73 billion) jointventure (JV) that will spearhead the flow of foreign direct investments (FDIs) from the Middle East.
The operations of the JV company will be undertaken by PetroSaudi International Ltd (PSI) and 1Malaysia Development Bhd (1MDB). The companies said in a joint statement issued yesterday that the JV will make strategic investments in highimpact projects in Malaysia. According to Prime Minister Datuk Seri Mohd Najib Razak in a Bernama report, Malaysia will put up US$1 billion of the fund for the joint venture, with Saudi Arabia providing the balance.
He said the government had sourced the money from a recent bond issuance.
"The money is already in place. It was confirmed by the central bank governor (Tan Sri Dr Zeti Akhtar Aziz) yesterday (Sept 29)," Mohd Najib, generate RM1 billion worth of spillover projects involving two hotels, a shopping mall and an office building from the development of LegoLand Malaysia. This mixed development will be built on 18ha of land surrounding the theme park.
"We are talking to potential partners and hope to announce three more partners by the end of this year," she said. LegoLand Malaysia, the first LegoLand theme park in Asia, which is to be built on a 22ha site, is expected to be completed by April 2012.
(This story appeared in The Malaysian Reserve on Oct 1, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)
The operations of the JV company will be undertaken by PetroSaudi International Ltd (PSI) and 1Malaysia Development Bhd (1MDB). The companies said in a joint statement issued yesterday that the JV will make strategic investments in highimpact projects in Malaysia. According to Prime Minister Datuk Seri Mohd Najib Razak in a Bernama report, Malaysia will put up US$1 billion of the fund for the joint venture, with Saudi Arabia providing the balance.
He said the government had sourced the money from a recent bond issuance.
"The money is already in place. It was confirmed by the central bank governor (Tan Sri Dr Zeti Akhtar Aziz) yesterday (Sept 29)," Mohd Najib, generate RM1 billion worth of spillover projects involving two hotels, a shopping mall and an office building from the development of LegoLand Malaysia. This mixed development will be built on 18ha of land surrounding the theme park.
"We are talking to potential partners and hope to announce three more partners by the end of this year," she said. LegoLand Malaysia, the first LegoLand theme park in Asia, which is to be built on a 22ha site, is expected to be completed by April 2012.
(This story appeared in The Malaysian Reserve on Oct 1, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)
Tabung Haji deposits at RM23b; 2.25% bonus
The deposit in Lembaga Tabung Haji has come a long way, hitting RM23 billion from a mere RM152,000 donation from the government during its initial set up in 1963.
It also began with the handling of only 5,000 haj performers in 1963, but today it handles about 26,000 pilgrims a year, Prime Minister Datuk Seri Mohd Najib Razak said in Kuala Lumpur yesterday.
"Tabung Haji aims to make 50% of the Muslim population in Malaysia as depositors with the bank. I am confident Tabung Haji will make a reality of this plan in a short time," he said when officiating the new TH logo.
As of July this year, TH had 5.09 million depositors.The prime minister also called on government linked companies (GLCs) to regularly update their business strategies in order to face changes in the global business world. "Today, we are happy that Tabung Haji is launching its new logo which will reflect the dynamism of the company and its readiness to face whatever business challenges in the future," Najib said.
Meanwhile, Tabung Haji has declared a 2.25% interim bonus payout amounting to RM465 million for the first half of its financial year ending Dec 31, 2009 to eligible depositors. The interim bonus payment is the first for TH and will be credited to the accounts of eligible depositors on Oct 5.
In a statement today, TH said that last year, it announced a five percent bonus payout and in 2007, made its maiden special bonus payout of 2% in addition to a five percent bonus payment. TH started paying a bonus to its depositors in 1966 — three years after its inception. In that year, TH made a three percent bonus payment to about 22,000 depositors. — Bernama (Sept 31, 2009)
It also began with the handling of only 5,000 haj performers in 1963, but today it handles about 26,000 pilgrims a year, Prime Minister Datuk Seri Mohd Najib Razak said in Kuala Lumpur yesterday.
"Tabung Haji aims to make 50% of the Muslim population in Malaysia as depositors with the bank. I am confident Tabung Haji will make a reality of this plan in a short time," he said when officiating the new TH logo.
As of July this year, TH had 5.09 million depositors.The prime minister also called on government linked companies (GLCs) to regularly update their business strategies in order to face changes in the global business world. "Today, we are happy that Tabung Haji is launching its new logo which will reflect the dynamism of the company and its readiness to face whatever business challenges in the future," Najib said.
Meanwhile, Tabung Haji has declared a 2.25% interim bonus payout amounting to RM465 million for the first half of its financial year ending Dec 31, 2009 to eligible depositors. The interim bonus payment is the first for TH and will be credited to the accounts of eligible depositors on Oct 5.
In a statement today, TH said that last year, it announced a five percent bonus payout and in 2007, made its maiden special bonus payout of 2% in addition to a five percent bonus payment. TH started paying a bonus to its depositors in 1966 — three years after its inception. In that year, TH made a three percent bonus payment to about 22,000 depositors. — Bernama (Sept 31, 2009)
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