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Bursa Malaysia Adds Inter-Pacific to Islamic-Compliant List

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KUALA LUMPUR (June 20): Bursa Malaysia Bhd has added Inter-Pacific Securities Sdn Bhd to the bourse operator and regulator’s Islamic participating organisations list to further grow the Islamic capital market.

Bursa Malaysia said in a statement today that Islamic stockbroking services played an important role, under which clients’ funds were placed in Shariah-compliant accounts.

“With the latest addition, investors will have a wider choice of Islamic POs (participating organisations) to represent them, which is in line with the priority of Bursa Malaysia-i, to provide a conducive marketplace for the Shariah investing community and to spur the growth and vibrancy of the Islamic capital market domestically and regionally,” Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan said in the statement.

According to Bursa Malaysia’s statement, Inter-Pacific is the 12th stockbroking firm under Bursa Malaysia’s Islamic participating organisations list.

The list includes Affin Hwang Investment Bank Bhd, AmInvestment Bank Bhd, BIMB Securities Sdn Bhd, CIMB Investment Bank Bhd, Hong Leong Investment Bank, Jupiter Securities Sdn Bhd, Kenanga Investment Bank Bhd, Malacca Securities Sdn Bhd, Maybank Investment Bank Bhd, RHB Investment Bank Bhd and TA Securities Holdings Bhd.

Originally published on www.theedgemarkets.com

 

Mintel: 13% of Asia-Pacific Product Launches Carry Halal Claim

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With food accounting for nearly two-thirds of business in the global halal economy, there has been a flurry of new product activity in Asia-Pacific.

According to market intelligence agency Mintel, 13% of all product launches in the region have carried the “halal” claim since 2012, with Indonesia, Malaysia and Thailand the top destinations in this arena.

Among the most prominent recent Islam-observant product launches tracked by Mintel has been Nissin’s Masuya-brand spicy seafood-flavoured Gekikara Ramen instant noodle, which has gone on sale in Indonesia. The extra-hot instant noodle is halal-certified and retails in a large portion 120g pack.

Also launched in Indonesia, the world’s biggest Muslim-majority country which seen a quarter of all Asia-Pacific new-product activity over the last five years, has been Family Rice’s Nasi Liwet fragrance rice. The halal certified product retails in a 500g pack that serves six portions.
In India, which is home to 172m Muslims according to the last census, Global Gourmet’s Bombay Bites jalapeño and cheese samosa was a notable halal launch. The vegetarian pastry triangles feature a green pepper and cheese filling, are halal certified, and retail in a 240g pack.
 Thailand, where 15% of new product launches have been halal in the last five years, has seen the introduction of Kang Goong by Okusno, a Japanese curry-flavoured shrimp chins snack. This claims to be high in calcium and low in sodium and chitosan. The halal certified product retails in a 17g pack.
Also a notable arrival, Jin Lv Cheng Ai De Lai Si’s ice cream-flavoured yogurt’s arrival in China claims to be made using milk sourced from its own pasture, and is halal certified. This natural product retails in a 120g pack. Though only 1.6% of its population is Muslim, China now accounts for 9% of all Asia-Pacific halal launches, according to Mintel.
Originally published on www.foodnavigator-asia.com

Push for Mergers Among Islamic Banks and Non-Bank Lenders in Malaysia

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CONVENTIONAL banks aside, there is a push by industry players for mergers and acquisitions (M&A) to take place in the crowded Islamic banking as well as the non-bank lender space.

There are 16 Islamic banks in Malaysia.

Two are full-fledged standalone banks: Bank Islam (M) Bhd and Bank Muamalat Malaysia Bhd.

Eight more are subsidiaries of conventional banks, while the remaining are foreign banks.

 Non-bank lenders include entities such as the Government-owned Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat), Bank Simpanan Malaysia, Bank Pertanian Malaysia Bhd and Malaysia Building Society Bhd (MBSB).

“There is no need for the spaces to be as fragmented as they are now as the country moves up the value chain,” says an analyst.

Having said that, he points out that some of the banks really need to improve their non-performing loans and balance sheets.

“Efficiency and productivity have to permeate across the entire ecosystem, be it conventional or otherwise,” he adds.

M&A activities in this particular sectors of the banking industry will also open up opportunities for major institutions to see how they can participate in them.

It was reported recently that Permodalan Nasional Bhd (PNB) which is the country’s largest fund management company, is believed to be open to the idea of acquiring Bank Rakyat in a move which could lead to value creation between Bank Rakyat and PNB-controlled companies.

Besides the MIDF Group which is the investment banking and asset management arm of PNB, the fund also controls Malayan Banking Bhd (Maybank) – the largest bank in the country that also has a regional presence.

PNB has a 60% stake in Malaysia’s only national reinsurer, MNRB Holdings Bhd which is grossly under-valued

Following the effects of the Asian financial crisis in the late 1990s, Bank Negara had called for a consolidation of the country’s then almost 60 financial institutions of which over 20 were local commercial banks.

Today, the country has eight local banking groups.

Nevertheless, while consolidation has happened in the conventional banking industry, new licences had been issued within the Islamic banking space to more Islamic banks like Bank Muamalat, Kuwait Finance House, Asian Finance Bank (AFB) and Al Rajhi Bank, resulting in the overcrowded situation.

Of the banks, AFB however is currently in talks with MBSB for a proposed merger.

Meanwhile, PT Bank Mandiri Tbk, Indonesia’s largest bank by assets, is soon expected to start operating here with full banking rights.

Bank Mandiri currently operates in Malaysia under the licence of remittance office.

 Originally published on www.thestar.com.my

Brunei Ranked 12th in Global Islamic Economy Indicator

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BRUNEI Darussalam has been ranked 12th in the latest Global Islamic Economy Indicator (GIEI), prepared by the answer company of Thomson Reuters.

Brunei made it to the top 15 list for the first time, moving up five spots replacing Egypt. The Sultanate had a big jump in the Halal Travel ranking (10 spots) and strong performance in Halal Food Ecosystem Development.

Its Halal certification-led Halal food product lines have made strong entrance in the UK market and Brunei Halal is getting due recognition as a result. Brunei also continues to benefit from being in the vicinity of Indonesia and Malaysia, two of the largest Halal sensitive Muslim travel markets, the GIEI report said.

Brunei is in top 10 in Halal Pharmaceuticals and Cosmetics and also triumphant in Modest Fashion category where the Sultanate ranked in the 12th place, Halal Travel (22nd) and Islamic Finance (27th).

Malaysia topped the ranking with the score of 121 followed by the United Arab Emirates (UAE) and Bahrain. Saudi Arabia, Oman and Pakistan were respectively positioned at fourth, fifth and sixth followed by Kuwait, Qatar, Jordan, and Indonesia.

Singapore held 11th position as the only country that is not a member of Organisation of Islamic Cooperation, while Brunei, Sudan and Iran were put at 12th, 13th and 14th place.

The indicator is prepared to show the current health and development of the Islamic economy ecosystem. The components of the ecosystem are Halal Food, Islamic Finance, Halal Travel, Modest Fashion, Halal Media and Recreation, and Halal Pharmaceuticals and Cosmetics.

The indicator does not focus on the overall size and growth trajectory of a country across the Islamic economy sectors; instead it evaluated them on relative strengths of the ecosystem they have to support the development of the Islamic economy.

Dubai Islamic Economy Development Centre (DIEDC), in partnership with Thomson Reuters and in collaboration with the Dinar Standard, a growth strategy research and advisory firm based in New York, introduced the Global Islamic Economy Indicator in 2014.

Originally published on www.borneobulletin.com.bn

Islamic Banks Expand, But ‘Double-Digit Growth Spree May be Over’

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Islamic banks have continued to expand their balance sheets and capital buffers, but the era of double-digit growth rates could be coming to an end while asset quality concerns creep up, an industry oversight body said recently.
Islamic finance, which has its core markets in the Middle East and Southeast Asia, follows religious principles that forbid interest and shun outright speculation, and as such is seen as an alternative to interest-based banking.
That proposition is underpinned by claims that Islamic finance can weather, if not avoid, the kind of financial turmoil that has embroiled conventional banking in recent years.
Islamic banks have indeed expanded but uncertainties in the global economy and political disquiet have taken their toll, the Islamic Financial Services Board (IFSB) said in its fifth financial stability report. Although it was weathered those challenges, the industry has moved away from double-digit growth rates enjoyed in previous years, the IFSB’s acting secretary-general Zahid ur Rehman Khokher said.
“This slowdown underscores the importance, more than ever, of strengthening the resilience of the Islamic financial system and addressing internal weaknesses and vulnerabilities.”
An IFSB survey of 170 Islamic banks and 83 “Islamic windows” in conventional banks across 17 countries found their combined assets grew by 10.9% to reach $1.4tn at the end of September 2016.
Islamic banks extended $939bn in financing during that same period, up from $826bn a year earlier, while their capital adequacy ratios remained above regulatory requirements.
Despite this, the asset quality of Islamic banks is deteriorating: Their net non-performing financing to capital ratio increased sharply to 25.6% at the end of September, up from 16.1% a year earlier.
In addition, the short-term liquidity of Islamic banks continues to be an area of concern, the IFSB said.
The IFSB also released findings of a study of stress-testing of Islamic banks conducted earlier this year.
The study found important links between four macroeconomic variables – namely interest rates, unemployment, real estate prices and oil prices – and the non-performing financing ratios, deposits, financing and assets of Islamic banks.
There are some bright spots, with the wider Islamic finance industry growing to $1.9tn in assets, with strong gains in sectors including Islamic insurance or takaful.
Takaful remains a small segment of the industry but contributions have grown by 12%, compared to 4% for conventional insurers, the IFSB said.
Scale remains a challenge for takaful firms, although the IFSB said it expected consolidation efforts to continue in the sector.

Originally published on www.gulf-times.com

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