tag:blogger.com,1999:blog-29791987801171830242024-03-21T04:55:22.598-07:00KL Conference On Sukuk 2020Date: 17-18 April 2020 Venue: Premiera Hotel, Kuala Lumpur - MalaysiaUnknownnoreply@blogger.comBlogger18125tag:blogger.com,1999:blog-2979198780117183024.post-45132459324348225992017-11-30T23:47:00.000-08:002019-04-19T03:43:06.951-07:00Event Summary (KLS2017) - KL Conference on Sukuk 2018<br />
<span style="font-family: "georgia" , "times new roman" , serif;"><span class="Apple-style-span" style="font-size: x-large;"><i>KL Conference on</i><span style="color: red;"> </span></span></span><b><span style="color: blue; font-family: "georgia" , "times new roman" , serif; font-size: x-large;">Sukuk 2020</span></b><br />
<span class="Apple-style-span" style="font-family: "georgia" , "times new roman" , serif; font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="color: red; font-family: "arial" , sans-serif; font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><br /></span></span></span></b></span>
<span class="Apple-style-span" style="font-family: "trebuchet ms" , sans-serif;"><span class="Apple-style-span" style="font-size: x-large;"><span class="Apple-style-span" style="color: red;"></span></span><span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="color: red; font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;">Date</span></span><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"> <span class="Apple-style-span" style="color: black;">: </span></span></span></span></b></span></span><span style="background-color: white; font-family: arial, helvetica, sans-serif; font-size: 14.85px;">17-18 April 2020</span><br />
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue; font-family: "trebuchet ms" , sans-serif;"><span style="color: red; font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;">Venue</span></span><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"> <span class="Apple-style-span" style="color: black;">: Premiera Hotel, Kuala Lumpur - Malaysia</span></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue; font-family: "trebuchet ms" , sans-serif;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;"><br /></span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><i><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-family: "trebuchet ms" , sans-serif; font-weight: normal;">“An international gathering of practitioners, scholars and experts to discuss and share their knowledge, expertise and experience on the principles, instruments and issues related to Sukuk, to be held at the world’s leading Islamic financial centre…Kuala Lumpur.”<o:p></o:p></span></span></i></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><i><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-family: "trebuchet ms" , sans-serif; font-weight: normal;"><br /></span></span></i></span></b></span>
<span class="Apple-style-span" style="font-size: x-large;"><b><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-family: "trebuchet ms" , sans-serif; font-weight: normal;"><span class="Apple-style-span" style="color: red;">Event site </span>:<span class="Apple-style-span" style="color: blue;"> <a href="http://www.sukuk.conference.blogspot.com/">www.sukuk.conference.blogspot.com</a></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: blue; font-family: "trebuchet ms" , sans-serif;"><br /></span></span></span></b></span></div>
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<b style="font-size: xx-large; text-align: left;"><span class="Apple-style-span" style="color: blue;"><span style="color: red; font-size: 12pt;"><span class="Apple-style-span" style="font-family: "trebuchet ms" , sans-serif; font-weight: normal;">KEY FOCUS/TOPICS:</span></span></span></b></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Global and regional development of Islamic finance<o:p></o:p></span></span></span></span></b></span></div>
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<b style="font-size: xx-large;"><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Ensuring Shariah compliance in Islamic financial instruments</span></span></span></span></b></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Global and regional development on Sukuk</span></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Types of Sukuk structures</span></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Innovative Sukuk structures</span></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Shariah issues on Sukuk</span></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Lefal Issues on Sukuk</span></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Challenges on Sukuk</span></span></span></span></b></span><br />
<b style="font-size: xx-large;"><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Sukuk during Global economic uncertainties</span></span></span></span></b><br />
<b style="font-size: xx-large;"><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;"><br /></span></span></span></span></b></div>
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<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span><span style="font-family: "trebuchet ms" , sans-serif;">Speakers are selected from Islamic banks, takaful operators, academicians, legal practitioners, consultants, regulatory bodies.</span><br />
<span style="font-family: "trebuchet ms" , sans-serif;"><br /></span><span style="font-family: "trebuchet ms" , sans-serif;">Among the speakers are:</span><br />
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<b style="font-size: xx-large;"><span class="Apple-style-span" style="color: blue;"><span style="color: red; font-size: 12pt;"><span class="Apple-style-span" style="font-family: "trebuchet ms" , sans-serif; font-weight: normal;">WHO SHOULD ATTEND:</span></span></span></b></div>
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<span class="Apple-style-span" style="font-family: "trebuchet ms" , sans-serif;"><span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="color: red; font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"></span></span></span></b></span><span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;">- Islamic bankers/bankers</span></span></span></span></b></span></span><br />
<b style="font-family: "trebuchet ms", sans-serif; font-size: xx-large;"><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;">- Regulators</span></span></span></span></b><br />
<span class="Apple-style-span" style="font-family: "trebuchet ms" , sans-serif;"><span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;">- Head of governmental departments</span></span></span></span></b></span></span><br />
<span class="Apple-style-span" style="font-family: "trebuchet ms" , sans-serif;"><span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;">- Financial planners/w</span></span></span></span></b></span></span><b style="font-size: xx-large;"><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">ealth advisors</span></span></span></span></b></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Financial consultants<o:p></o:p></span></span></span></span></b></span></div>
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<b style="font-size: xx-large;"><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Legal practitioners (lawyers)</span></span></span></span></b></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Academicians (lecturers)<o:p></o:p></span></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b style="font-family: "trebuchet ms", sans-serif;"><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;">- Takaful/insurance operators</span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Entrepreneurs (businessmen/importers/exporters etc)<o:p></o:p></span></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Investors</span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">- Other professionals </span></span></span></span></b></span><br />
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="color: red; font-size: 12pt;"><span class="Apple-style-span" style="font-family: "trebuchet ms" , sans-serif; font-weight: normal;">REGISTRATION:</span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue; font-family: "trebuchet ms" , sans-serif;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;"><b>Early Bird Fee</b>:</span></span></span><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;"> <o:p></o:p></span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">Registration with payment by <o:p></o:p></span></span></span></span></b></span><span style="background-color: white; font-family: arial, helvetica, sans-serif; font-size: 14.85px; text-align: start;">17 March 2020</span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">Malaysian : RM1,700<o:p></o:p></span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">International : USD700</span></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;"><br /></span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue; font-family: "trebuchet ms" , sans-serif;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;"><b>Normal Fee</b>:</span></span></span><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;"><o:p></o:p></span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">Registration with payment after 17 March </span></span></span></span></b></span><b style="font-size: xx-large;"><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">2020</span></span></span></span></b></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">Malaysian : RM2,000<o:p></o:p></span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">International : USD700<o:p></o:p></span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;">Special fee for Malaysian university lecturers : RM1,200 (group discount not applicable)<o:p></o:p></span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;"><br />Fee is inclusive of lunch, refreshments and seminar package only.</span></span></span></span></b></span><br />
<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black; font-family: "trebuchet ms" , sans-serif;"><br /></span></span></span></span></b></span></div>
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<span class="Apple-style-span" style="font-size: x-large;"><b><span class="Apple-style-span" style="color: blue; font-family: "trebuchet ms" , sans-serif;"><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;"><b>Group Discount</b>:</span></span></span><span style="font-size: 12pt;"><span class="Apple-style-span" style="font-weight: normal;"><span class="Apple-style-span" style="color: black;"><o:p></o:p></span></span></span></span></b></span></div>
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<span style="background-color: white; font-family: "arial" , "tahoma" , "helvetica" , "freesans" , sans-serif; font-size: 15px; text-align: left;">Enjoy 10% discount for 3 or more delegates registered from the same organisation and the same billing source.</span></div>
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<span class="Apple-style-span" style="font-family: "arial" , "helvetica" , sans-serif;"><span class="Apple-style-span" style="color: red;">DOWNLOAD BROCHURE</span></span><br />
<span class="Apple-style-span" style="font-family: "arial" , "helvetica" , sans-serif;">(will be uploaded soon...</span><span style="font-family: "arial" , "helvetica" , sans-serif;">for now you may request for tentative program or you will be given a tentative program when register online)</span><br />
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<span class="Apple-style-span" style="font-family: "arial" , "helvetica" , sans-serif;"><span class="Apple-style-span" style="color: red;">REGISTER ONLINE</span></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-29141802936198531032016-12-06T19:56:00.004-08:002016-12-06T20:04:11.705-08:00Green sukuk herald new era of environmentally responsible investment<div class="separator" style="clear: both; text-align: center;">
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<span style="font-family: Georgia, Times New Roman, serif;"><span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;">The Paris Agreement on climate change with its tougher rules on reducing the emission of greenhouse gases is seen by many analysts as a driver for the advancement of so-called green bonds, and with them green sukuk, a new variety of Islamic bonds for investments in environmental-friendly and clean energy projects. </span></span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;" /><span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;">The new climate agreement prompted a number of Islamic banks to consider an expansion of their product ranges in socially responsible investments towards “green finance” in order to catch up with their conventional peers, many of which are already placing green bonds for years quite successfully. And, notably, two of the six signatory Gulf Cooperation Council (GCC) nations, Saudi Arabia and UAE, which are also the region’s largest sukuk issuers, surprisingly quickly ratified the Paris accord, enforced it on November 4 and December 3, respectively, and are supposed to take respective “green action’ in a variety of fields, including financing.</span></span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;" /><span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;">In a nutshell, green bonds evolved in the conventional finance world as a specific sub-set of bonds used for clean energy projects, mainly issued by renewable energy companies or by corporations for the construction and operation of green assets. They were introduced by the World Bank as early as in 2008 to give investors an innovative method to support clean energy and other low-carbon projects. Since then, conventional financial instruments supporting green projects have been on an impressive upward growth trajectory, with financial heavyweights such as Goldman Sachs, Blackrock, Norway’s sovereign wealth fund and many other large conventional asset managers jumping upon the bandwagon.</span></span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;" /><span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;">In the Islamic finance world, the development was a bit slower. Reasons are that, namely in the oil-rich Gulf States, the perception of environmental problems has not been particularly distinct in the past, and initiatives against climate change long had no priority in government policies or in civil society. But with the slump in oil and gas prices, the need for economic diversification and the growing advantage of the West, particularly Europe, in environmental technologies, the Gulf States noticed a need for action. Some of the Gulf banks are now embracing the green bond concept by starting to include green sukuk, realising in the process that ethical requirements of green projects fit in well with Shariah-compliance.</span></span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;" /><span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;">The Bahrain-based General Council for Islamic Banks and Financial Institutions found in a survey released last month that Islamic banks indeed want to increase green financing options. The survey, based on responses from 86 Islamic finance institutions across 29 countries mainly from the Middle East and Southeast Asia, as well as Africa, said close to one-third of small Islamic banks cited a “moderate exposure” to the green and renewable energy sectors, compared to 15.5% for large Islamic banks which means there is still considerable potential for Shariah-compliant green financing across the industry.</span><br style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;" /><span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;">Technically, a green sukuk is not a complicated Islamic finance product.</span></span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;" /><span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;">“The structuring of a green sukuk wouldn’t be much different from that of a normal sukuk. The sukuk’s structure would largely depend on the available green assets to support the sukuk or the environmentally friendly project to be financed,“ says Hari Rai, Dubai-based partner of international law firm Latham & Watkins. “Given the size of the global sukuk market, it is almost surprising that Islamic banks and sovereigns have so far not really tapped into the potential of a green sukuk,“ he adds.</span></span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;" /><span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;">There have been some recent examples, though. In Malaysia, the largest sukuk issuer globally, a local lender has introduced green mortgages to facilitate installation of solar systems, while an Islamic bank in Jordan is developing alternatives to medium-term loans to fund energy efficient and renewable energy projects. There have also been new initiatives to promote green sukuk, namely the Green Sukuk and Working Party (GSWP), jointly established by Masdar City’s Clean Energy Business Council, the Mena branch of the Climate Bonds Initiative and the Gulf Bond and Sukuk Association. It aims to promote and develop Shariah-compliant financial products to invest in solutions that seek to prevent climate change. </span></span><br />
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<span style="font-family: Georgia, Times New Roman, serif;"><span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;">The scope of green sukuk can be quite substantial. They can not only be used to finance construction of green developments or infrastructure, but also to refinance construction or project debt or to finance the payment of a government-granted green subsidy. Eligible assets for green sukuk as per the international Climate Bond Standards include solar parks, bioenergy plants, wind energy, clean water, hydropower and agricultural irrigation projects, energy efficiency applications and low-carbon buildings, low-carbon land use, electric vehicles and infrastructure, geothermal energy and marine-related environmental projects.</span></span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;" /><span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;">However, who is eager to contribute to a cleaner environment by investing into a green sukuk should also take into account the challenges as with any other investment, for that matter. While demand for green sukuk will certainly grow in the future and Gulf governments are likely to promote them more intensely, they entail a higher risk profile than conventional sukuk while the secondary market for them is still small and performance measurement standards for the segment aren’t developed yet.</span></span><br />
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<span style="background-color: white; box-sizing: border-box; color: #6d6767; text-align: justify;"><span style="font-family: Georgia, Times New Roman, serif;">SOURCE: Gulf Times/6 Dec 2016</span></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-75679401540632748342016-12-06T19:12:00.001-08:002016-12-06T19:23:57.768-08:00Sukuk market long way from 2012 heyday - report<div style="color: #111111; font-weight: 400; line-height: 24px; margin: 0px 0px 20px 80px; padding: 0px; text-align: justify;">
<span class="articleLocatio</span>n" style="transform: translate3d(0px, 0px, 0px);"><span style="font-family: "georgia" , "times new roman" , serif;">The market for sukuk, or Islamic bonds, is struggling to recover from last year's dip in issuance and it could take years for supply to return and even longer to address pent up demand, a report released on Tuesday showed.</span></span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Sukuk have become an important funding tool for both banks and corporates across the Middle East and Southeast Asia, but a reliance on sovereign issuance and an economic slowdown due to lower oil prices have taken their toll.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Issuance of sukuk is down 18 percent for the first nine months this year compared with the same period last year, while the year-end figure could exceed $50 billion, according to a report by Thomson Reuters.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Issuance is estimated to gradually recover over the next few years to $54 billion in 2017 and $59 billion in 2018, but this is well below the record $134 billion seen in 2012.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">This is largely due to the lasting effects of Malaysia's central bank decision to stop issuing short-term sukuk in 2015, opting instead for targeted Islamic treasury bills reserved for domestic Islamic banks, the report said.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Several Gulf countries including Saudi Arabia have also opted to fund their budget deficits with conventional bonds, amid lack of new names such as Britain and Hong Kong, which tapped the market in 2014.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Despite this, there has been a shift in the structures used to design sukuk, which could appeal to new issuers.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Sukuk are Islamic investment certificates that pay returns on money invested, instead of interest, to obey Islam's ban on interest, with over a dozen different structures in use.</span></div>
<span style="font-family: "georgia" , "times new roman" , serif;"><span class="article-prime" style="transform: translate3d(0px, 0px, 0px);"></span><span id="midArticle_0" style="transform: translate3d(0px, 0px, 0px);"></span><span id="midArticle_1" style="transform: translate3d(0px, 0px, 0px);"></span><span id="midArticle_2" style="transform: translate3d(0px, 0px, 0px);"></span><span id="midArticle_3" style="transform: translate3d(0px, 0px, 0px);"></span><span id="midArticle_4" style="transform: translate3d(0px, 0px, 0px);"></span><span class="article-divide first-article-divide" style="transform: translate3d(0px, 0px, 0px);"></span><span id="midArticle_5" style="transform: translate3d(0px, 0px, 0px);"></span><span id="midArticle_6" style="transform: translate3d(0px, 0px, 0px);"></span><span class="article-divide second-article-divide" style="transform: translate3d(0px, 0px, 0px);"></span><span id="midArticle_7" style="transform: translate3d(0px, 0px, 0px);"></span></span><br />
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<span style="font-family: "georgia" , "times new roman" , serif;">An agency-based structure known as wakala had the highest value of sukuk issued in 2016 at $12.1 billion, a hybrid format that allows issuers to use a smaller level of tangible assets to underlie a sukuk transaction.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">This has displaced sukuk based on ijara, a sale and lease-back contract popular among Gulf issuers, which saw $7.3 billion worth of issuance this year.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Ijara requires tangible assets for the full amount raised via sukuk, restricting its use by firms with fewer eligible assets on hand.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Diversification of funding sources remains the most appealing reason to issue sukuk, according to the report's survey of investors and sukuk arrangers conducted during August.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Sukuk still lack active secondary markets while governments have yet to incorporate them into their debt management strategies, steps which could increase their appeal, the survey found. </span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">SOURCE: Reuters/6 Dec 2016</span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-47344744396443124562016-12-05T20:09:00.000-08:002016-12-07T20:09:59.000-08:00Global sukuk issuance exceeds RAM’s projection, Malaysia still leads<div class="separator" style="clear: both; text-align: center;">
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<span style="background-color: white; color: #333333;"><span style="font-family: Georgia, Times New Roman, serif;">KUALA LUMPUR: RAM Rating Services Bhd said global sukuk issuance as of end-November 2016 totalled US$72bil (RM319.9bil), surpassing its earlier projection of US$55bil to US$65bil (RM244.3bil to RM288.8bil) for the year.</span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">In a statement on Monday, RAM said Malaysia retained its top spot with a 41.7% market share, followed by Indonesia (16.4%), the United Arab Emirates (11.0%), Turkey (7.1%) and Pakistan (6.7%).</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">The ratings agency noted that the corporate sector posted a 35.5% year-on-year jump in global sukuk issuance to US$30.6bil (RM135.9bil) as of end-September this year versus US$22.6bil (RM100.4bil) in the same period last year.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">The top three issuers were originated from Malaysia, the UAE and Qatar, namely the Public Sector Home Financing Board (US$0.96bil), Emaar Sukuk Ltd (US$0.75bil) and the State of Qatar (US$0.72bil), respectively. </span></div>
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<span style="background-color: white; color: #333333;"><span style="font-family: Georgia, Times New Roman, serif;">A total of US$5.9bil of global sukuk was issued in September, bringing the year-to-date (YTD) issuance to US$58.9bil for the month.</span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">RAM also highlighted that a total of RM9.6bil of domestic sukuk was issued in September, leading to a YTD issuance value of RM99.5bil.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">“True to tradition, local-currency sukuk issues were dominated by the financial services and infrastructure and utilities sectors,” it said.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">RAM head of Islamic finance, Ruslena Ramli, said large issuances from the financial and infrastructure sectors had been a boon to the sukuk market, and were likely to remain a key catalyst of future growth.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">“As of end-November this year, the issuance value of domestic Islamic debt securities stood at RM125.3bil, exceeding RAM’s full-year projection of RM100bil to RM120bil,” she said.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;"><span style="background-color: white; color: #333333;">SOURCE:</span><span style="background-color: white; color: #333333;"> Bernama/5 Dec 2016</span></span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-31326612847993643542016-11-28T17:34:00.002-08:002016-11-28T17:37:20.906-08:00The rise of the Sukuk<div style="text-align: justify;">
The financial crisis of 2008-09 once again proved that the structural flaws of conventional system result in its frequent collapse. Among the multiple quoted reasons, one of the most prominent ones is excessive leveraging and low transparency owing to the absence of the mandatory requirement of complete information. Hence, the focus in the post-financial crisis has shifted towards having greater accountability, enhancement in transparency, improvement in governance and a strict limit on leveraging.
This has persuaded the world to look towards Islamic finance as a viable financial alternate.</div>
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The prohibition of usury and encouragement of risk-sharing forms a financial system that creates a direct link with the real sector. This demonstrates that there exists a strong link between the performance of the asset and return on the capital used to finance it. The asset-backed nature of Islamic financial transactions, in addition to the prohibition on speculative activities and the key pillars of equity, justice and transparency on which the Islamic financial system is based make it a more stable and prudent system than its conventional counterpart.
Sukuk, the most popular global instrument of Islamic finance, is being used by many developing countries as a tool of fiscal policy for economic development.</div>
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Broadly there are two types of Sukuk: (i) Asset-based Sukuk – raising finance where the principal is covered by the capital value of the asset, and the returns and repayments to Sukuk-holders are not directly attached to those assets; and (ii) Asset-backed Sukuk – raising finance where the principal is covered by the capital value of the asset but the returns and repayments to Sukuk-holders are directly linked to the performance of these assets.
In terms of structure, 14 different types of Sukuk structures have been recognised by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), a Bahrain-based standard Setting organization.</div>
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These structures are mainly based on the underlying modes of Islamic finance, namely murabahah, musharakah/mudharabah, wakala, istisna and ijarah among others, or combinations of these.
Since its inception, various structures of Sukuk have been successfully used by corporates and governments to raise funds. Projects like roads, railways, airports and hospitals etc, which generate revenues from tangible assets and are consistent with the Islamic rules of finance, are particularly appropriate for Sukuk financing. Given the importance of infrastructure development for sustainable economic growth, there is a large demand in emerging markets for Sukuk.
Sukuk enhance the stability of financial institutions by providing them with improved portfolio diversifications and liquidity. Sukuk also encourage genuine transactions as these are based on real, identifiable, existing assets. This results in the development of a stable and sound economy, founded on real assets and productive activities as opposed to artificial paper based transactions. Strict adherence to Shariah principles of ownership, transparency and risk-sharing ensure a relatively resilient position of Sukuk than conventional bonds.</div>
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According to research, it has been proven that Islamic securitisation –particularly due to its ethical foundation and its reliance on real tangible assets if implemented – would have, arguably, reduced some of the unfavourable outcomes of the 2008 financial crisis, as real collateral limits the possibilities of speculative activities.
Pakistan joined the global Sukuk market with the issuance of its first international sovereign Sukuk of $600 million in 2005. In the domestic Sukuk market, the first Sukuk was issued in 2006. Since then more than 90 Sukuk (including corporate Sukuk and Government of Pakistan Sukuk) have been issued. However, in terms of volume, GoP Ijara Sukuk dominate the overall Sukuk market of the country.
Al-ijara Sukuk, the most popular structure, represent ownership of equal shares in a rented real estate or the usufruct of the real estate. For Sovereign Ijara Sukuk of the government of Pakistan, a special purpose vehicle (SPV) known as the Pakistan Domestic Sukuk Company Limited (PDSCL) was established; the PDSCL issues Sukuk.</div>
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The PDSCL raises funds from Sukuk-holders to acquire assets from the government and declare trust on these assets for the benefit of Sukuk-holders.
Each Sukuk certificate represents an undivided beneficial ownership interest in the trust assets. Subsequently, the trustee leases the assets for periodic payment of rentals for the life of the Sukuk. The rentals are received periodically by the trustee and distributed to the Sukuk-holders over the life of the Sukuk. On maturity of the Sukuk, the trustee sells the trust assets and the government purchases the assets while the proceeds are paid to the Sukuk-holders.
Till now the government has issued total 18 domestic Sukuk and three international Sukuk. However, the share of Pakistan in the global market is still very low. According to the International Islamic Financial Market (IIFM), in the Sukuk database of December 2015 Pakistan’s share was below three percent (the issuance of two domestic Sukuk of Rs196.6 billion and one international Sukuk post-December 2015).</div>
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Given that Pakistan has identified the country’s infrastructure needs in its Medium Term Development Framework, the financing for carrying out such developmental projects can be achieved through issuance of Sukuk.
Owing to its inherent strengths along with infrastructure requirements in the world, the global Sukuk market is expected to remain buoyant. The issuance of Sukuk is a complex process, and detailed documentation is required at each stage which ensures transparency. The expansion and progression of the Sukuk industry requires coordinated efforts from all stakeholders including issuers, regulators and investors.
The potential of Sukuk for economic growth, strengthening financial stability and catalysing inter-regional investment flows makes it an attractive asset class for issuers and investors. Going forward, it is hoped that the government will exploit the potential of Sukuk for broad-based development of the country.
The writer is a joint director at the
Islamic banking department of the SBP.
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SOURCE: The News / 28 November 2016</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-30863028781313964762016-11-22T06:03:00.002-08:002016-11-22T06:04:00.965-08:00Jordan looks to sukuk to bolster financial toolkit<div style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; font-family: TabulaITCStd-Black, Tahoma, Geneva, sans-serif; font-size: 16px; margin-bottom: 22px; outline: 0px; padding: 0px; vertical-align: baseline;">
<span style="background-attachment: initial; background-clip: initial; background-color: white; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">Building on recent growth in Islamic finance, Jordan is expanding its funding options and tapping a rising market through the issuance of <em style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">sukuk</em> (Islamic bonds).</span></div>
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<span style="background-color: white;">Two issuances</span></h2>
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<span style="background-color: white;">This year the Central Bank of Jordan (CBJ) issued two rounds of sharia-compliant sovereign bonds for the first time in the country’s history. </span></div>
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<span style="background-color: white;">The first offering, released in May, used a <em style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">murabaha</em> (cost-plus financing) structure and was valued at JD75m ($105.7m). The sale successfully attracted JD205m ($289m) in bids from investors at a coverage ratio of 2.73. Meanwhile, the second sukuk, issued in mid-October, used an<em style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;"> ijara</em> (leasing) structure and was valued at JD34m ($47.9m). The latter sale was more than three times oversubscribed.</span></div>
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<span style="background-color: white;">The bonds have a five-year maturity, with expected profit rates of 3.5% and 3.01%, respectively.</span></div>
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<span style="background-color: white;">While both issues have been termed sovereign, the May sukuk – which was designed to provide liquidity to finance the operations of two government-owned companies, the National Electric Power Company and the Water Authority of Jordan – is backed by the utility companies rather than the government, whereas the October issue – which will be used by the Ministry of Finance (MoF) – is guaranteed by the government.</span></div>
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<span style="background-color: white;">The sales were accompanied by a move in September, when the government signed an agreement with the International Islamic Trade Finance Corporation to finance basic imports with sharia-compliant funds.</span></div>
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<span style="background-color: white;">The Jordanian government expects net domestic borrowing will reach approximately JD896m ($1.26bn) this year, according to press reports.</span></div>
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<span style="background-color: white;">Market snapshot</span></h2>
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<span style="background-color: white;">The recent sukuk offerings are part of a broadening of Jordan’s Islamic financial services industry in the past couple of years.</span></div>
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<span style="background-color: white;">At the end of July last year the Governorate Development Fund (GDF) – which was established in 2011 to finance small and medium-sized projects, as well as entrepreneurial initiatives – partnered with the Hajj Fund to offer sharia-compliant financing options.</span></div>
<div style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; font-family: TabulaITCStd-Medium, Tahoma, Geneva, sans-serif; font-size: 16px; margin-bottom: 22px; outline: 0px; padding: 0px; vertical-align: baseline;">
<span style="background-color: white;">The GDF plans to use a variety of Islamic financial structures, such as <em style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">murabaha, ijara </em>and <em style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; margin: 0px; outline: 0px; padding: 0px; vertical-align: baseline;">istisnah,</em> to fund industrial and service projects that aim to increase employment in the country.</span></div>
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<span style="background-color: white;">Last year also saw the Jordan Dubai Islamic Bank (JDIB) launch sharia-compliant investment certificates of deposit, the first to be offered by an Islamic financial institution in Jordan.</span></div>
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<span style="background-color: white;">Earlier this year flagship carrier Royal Jordanian finalised a $275m, five-year loan facility, which will be partially funded through Islamic financing, to pay down its incurred debt and restructure the company.</span></div>
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<span style="background-color: white;">Strong foundations</span></h2>
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<span style="background-color: white; color: black;"><a href="http://www.oxfordbusinessgroup.com/overview/engines-growth-banks-remain-strong-capital-markets-await-boost-islamic-finance-products-and-insurers" style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; border: 0px; cursor: pointer; margin: 0px; outline: 0px; padding: 0px; text-decoration: none; vertical-align: baseline;">Islamic finance is not new to Jordan,</a> with local lenders Jordan Islamic Bank (JIB) and the Islamic International Arab Bank operating in the country since the 1970s and 1990s, respectively.</span></div>
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<span style="background-color: white;">Yet, while Jordan introduced a framework for the sector as early as 1978, with the implementation of the Jordan Islamic Bank for Finance and Investment Act No. 13, it was not until more recently that the government began to proactively encourage the burgeoning industry.</span></div>
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<span style="background-color: white;">Last year the CBJ took another regulatory step, issuing the Corporate Governance for Islamic Banks Instructions No. 61, which aim to increase accountability and transparency among Islamic financial institutions.</span></div>
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<span style="background-color: white;">The Islamic finance industry in Jordan, though small, has been steadily growing since 2010, when JDIB – established by the Dubai Islamic Bank and its partner Jordan Dubai Capital – began its operations. One year later local company Al Rajhi Cement offered Jordan’s first sukuk, a seven-year, JD85m ($119.6m) issue.</span></div>
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<span style="background-color: white;">In 2012 Parliament passed the Islamic Finance Sukuk Law, enabling both private and public entities to issue sukuk in dinars and foreign currency. The long-awaited legislation had been in development since 2010.</span></div>
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<span style="background-color: white;">Building on this, in April 2014 the government passed new by-laws specifying the structure and transfer framework for issuance of sukuk. This was followed in July of that year by the Jordan Securities Commission’s introduction of rules allowing the issuance of sharia-compliant debt.</span></div>
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<span style="background-color: white;">Future growth</span></h2>
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<span style="background-color: white;">The legislation has helped the Islamic financial sector bolster the country’s debt market.</span></div>
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<span style="background-color: white;">In May local real estate developer Al Tajamouat for Touristic Projects, also known as Taj Mall, sought to shore up its finances, with the JDIB and investment bank JordInvest jointly issuing JD45m ($63.6m) worth of sukuk on behalf of the company.</span></div>
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<span style="background-color: white;">Meanwhile, the government has introduced proposals to further develop Jordan’s Islamic financial services industry.</span></div>
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<span style="background-color: white;">In a bid to make sukuk available at the retail level, the MoF commissioned the establishment of the Islamic Corporation for the Development of the Private Sector last year with the objective of providing sukuk-related technical help to private sector companies.</span></div>
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<span style="background-color: white;">Signalling future growth, in September the Economic Policy Council – a 15-member body chaired by King Abdullah II – proposed to expand the targeted sukuk market to individuals, as well as create a JD150m ($212m) private equity fund, to be partially financed by Islamic banks.</span></div>
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<span style="background-color: white;">SOURCE: Oxford Business Group / 22 November 2016</span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-22864600354332575862016-11-16T23:44:00.000-08:002016-11-18T23:52:46.134-08:00Bahrain approaches banks about sukuk sale in Q1 2017<div style="color: #111111; font-weight: 400; line-height: 24px; margin: 0px 0px 20px 10px; padding: 0px; text-align: justify;">
<span style="font-family: "georgia" , "times new roman" , serif;">The Kingdom of Bahrain is in talks with lenders for an Islamic bond, or sukuk, which is expected to be issued in the first quarter of 2017,<span style="white-space: nowrap;"> banking</span> sources told Reuters.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">No banks have been appointed yet to arrange the debt transaction, the bankers said on condition of anonymity because the information has not been made public. The size of the debt issuance will be a minimum of $500 million, one of the banking sources said.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Bahrain's Ministry of Finance was not available for immediate comment.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">The Kingdom has some $5 billion-equivalent in debt maturing in 2017, mostly consisting of short-term local currency treasury bills. It has no U.S. dollar bond expiring next year, Thomson Reuters data shows.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Bahrain's latest U.S. dollar debt issuance was in October, when it sold a $2 billion<span style="white-space: nowrap;"> </span>comprising a $1 billion sukuk and a $1 billion conventional bond.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;"><span id="midArticle_5" style="color: black; transform: translate3d(0px , 0px , 0px);"></span><span style="color: black;"></span><span class="article-divide second-article-divide" style="color: black; transform: translate3d(0px , 0px , 0px);"></span></span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">The $1 billion long seven-year sukuk, maturing in February 2024, carries a 5.625 percent coupon rate, while the conventional bond, with a 12-year maturity period, was issued with a 7 percent interest rate.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">The bonds were arranged by Bank ABC, BNP Paribas, Credit Suisse, JP Morgan and Standard Chartered.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Bahrain is rated BB by S&P and BB+ by Fitch.</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;"><span id="midArticle_7" style="color: black; transform: translate3d(0px , 0px , 0px);"></span><span id="midArticle_8" style="color: black; transform: translate3d(0px , 0px , 0px);"></span></span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">(Editing by Jason Neely)</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;"><span style="color: #111111;">SOURCE: Reuters/16 Nov 2016</span></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-16536817583929895252016-11-15T00:01:00.000-08:002016-11-19T00:01:14.600-08:00Azimut and Maybank to jointly manage sukuk fund, seek new markets<div style="text-align: justify;">
<span style="font-family: "georgia" , "times new roman" , serif;">Nov 15: Italian money manager Azimut Holding SpA will jointly manage its Islamic bonds fund with Maybank Asset Management Group to cater to growing demand for hard currency sukuk products, the two firms said on Tuesday.
The partnership will allow the fund to penetrate new markets including Malaysia and Singapore, where Maybank Asset Management already operates, the firms said in a joint statement. </span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">Azimut, through its wholly-owned Turkish asset management arm, launched its global sukuk fund in 2013 which has over $130 million in assets.
Maybank Asset Management launched a U.S. dollar-denominated sukuk fund of its own in 2014.
Sukuk funds remain tiny compared to their conventional fixed-income counterparts, but the sukuk market has widened in recent years thanks to an increasing number of issuers and investors.
Turkey, Pakistan, Bahrain and Malaysia are among the sovereigns that have issued dollar-denominated sukuk in the past year. (Reporting by Bernardo Vizcaino; Editing by Eric Meijer)</span></div>
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<span style="font-family: "georgia" , "times new roman" , serif;">SOURCE: Reuters/15 Nov 2016</span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-83590693822717208722016-11-09T20:36:00.000-08:002016-11-18T20:41:47.719-08:00Saudi boost for sukuk market<div style="text-align: justify;">
<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;">The international sukuk market, of which Malaysia accounts for some 66 per cent of global issuances, received a major boost when Saudi Finance Minister Ibrahim Al Assaf confirmed at a meeting with Christine Lagarde, managing director of the International Monetary Fund (IMF), late last month in Riyadh that the kingdom’s public debt issuance programme will not be limited to conventional bonds and that sukuk will play an important role. </span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><br /></span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;">The global sukuk market had a flat year in 2015, impacted by the slump in the price of crude oil and other commodities and the sluggish global economic recovery. The value of sukuk issued last year fell to US$60.7 billion (RM255 billion) from US$107 billion in 2014 partly because of Bank Negara Malaysia’s decision to stop issuing short-term ringgit sukuk. Nevertheless, the Malaysian capital market continued its impressive growth across all segments last year, expanding by 2.1 per cent to RM2.82 trillion, equivalent to 2.5 times the size of the domestic economy. Of this, according to the Securities Commission Malaysia, the Islamic Capital Market (ICM) grew by 6.7 percent to RM1.70 trillion last year, compared with RM1.59 trillion in 2014. </span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><br /></span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;">The signs are of a rebound this year, with sukuk issuances already reaching US$50 billion in the first four months of the year. Since then, there has been steady traction in sukuk issuance by sovereigns in the international and domestic markets and by corporates. In this context, the Saudi announcement and those by other Gulf Cooperation Council (GCC) states, such as Kuwait, Oman, Qatar, Bahrain and United Arab Emirates, indicating that they will also tap the international sukuk and bond markets to part finance their budget deficits, augurs well for the sukuk market next year. </span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><br /></span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;">The Saudi Finance Ministry had also stressed that the kingdom plans to raise US$120 billion from the international markets by 2020. The kingdom’s budget deficit last year was US$98 billion. This follows the successful issuance last month by the Saudi government of a record US$17.5 billion conventional bond through three tranches in the international market — the single largest emerging market bond sale to date, surpassing the US$16.5 billion issuance by Argentina in April. The price of oil is hovering at US$50 per barrel, which is about US$10 per barrel higher than last year. </span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><br /></span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;">The IMF expects gross domestic product growth in Saudi Arabia to bottom out at 1.2 per cent this year, rebounding to 2.0 per cent next year. Given these economic and public financing dynamics, Islamic bankers in Malaysia and the GCC region I have spoken to are optimistic about the prospects for the sukuk market, especially over the next two years, given the increased demand for financing in these countries, including for infrastructure and in the GCC for allied development partly in the context of Dubai Expo 2020 and FIFA World Cup in Doha in 2022. Al Assaf recently stressed that stabilising the kingdom’s net foreign assets held by the Saudi Arabian Monetary Agency (SAMA), the central bank, is a priority and that its debt issuance programme in the international markets would be an orderly process. By September, SAMA foreign holdings totalled US$546.7 billion, which, according to Al Assaf, is in “a healthy position”. </span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><br /></span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;">Saudi bankers have welcomed this first public announcement by the finance minister on the role of sukuk in the kingdom’s debt issuance programme. They expect a debut Saudi sovereign sukuk early next year and stress the need for a well-structured public borrowing policy in the international market, which will give confidence and certainty to international and domestic investors. As such, the outlook for the Islamic capital market in the kingdom looks very positive. The fact that the bond was oversubscribed to the tune of US$67 billion reflects the robust latent demand in a global market starved of such papers. This was further highlighted by the fact that the pricing was tight, especially for the 30-year tranche, which was priced at 210 basis points over United States Treasuries, the same for a similar bond issued by Qatar in May. </span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><br /></span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;">The pricing for a Saudi sovereign sukuk could be even tighter because of the latent demand for syariah-compliant papers given that Islamic investors could not partake in the US$17.5 billion bond offering. The challenge for Saudi Arabia is to build up a yield curve. The best way to do this is to become a frequent issuer of government papers with varying maturities, sizes and even currencies in the international markets. Frequent issuances will make the pricing tighter and at the same time offer decent yields to investors. “The issuance was clearly aimed at international investors in China, the US and Europe, who are not familiar with sukuk. </span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><br /></span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;">The Saudi authorities preferred a conventional issuance this time because this is what they are most familiar with and they wanted a quick closure. Perhaps in the next issuance they may opt for a mixed issuance, comprising bonds and sukuk tranches, or an entirely sukuk offering,” explained a senior Saudi banker. SAMA supports the development of a robust ICM in the kingdom, which is the second largest issuer of sukuk after Malaysia. Government-linked entities — such as Saudi Aramco, the largest oil company in the world, and its various subsidiaries; Saudi Basic Industries Corporation, the world’s largest petrochemicals producer and exporter; and, the General Authority for Civil Aviation, in addition to a host of corporates and banks — are regular issuers of sukuk. </span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><br /></span></span></div>
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<span style="background-color: #e6e7e8; color: #333333;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;">Sukuk as a unique fundraising instrument has a potential beyond its traditional markets and to become a truly globalised financing instrument for monetary policy and liquidity management, infrastructure and urban regeneration financing, and even for social causes, such as immunisation and monetising waqf assets. It’s up to Malaysia and Saudi Arabia to nurture this ambition and put sukuk on the global map! </span></span></div>
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<span style="background-color: white; color: #333333; font-family: "georgia" , "times new roman" , serif;">Mushtak Parker is an independent London-based economist and writer</span></div>
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<span style="background-color: white; color: #333333; font-family: "georgia" , "times new roman" , serif;">Source: NST 9 Nov 2016</span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-35124673431059145882016-11-06T01:00:00.000-07:002016-11-18T23:34:39.399-08:00Sukuk issuance to drive growth in Islamic finance<div style="background-color: white; color: #333333; font-family: Arial, Helvetica, sans-serif; font-size: 15px; line-height: 20px; margin-bottom: 30px;">
Dubai: Much of the growth in Islamic finance is expected to come from capital markets business relating to sukuk (Islamic bond) according to Standard Chartered Saadiq.</div>
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“Sukuk is now mainstream component of capital markets in core Islamic finance markets such as Malaysia and the UAE. While Malaysia dominates the local currency issuance, the GCC leads in international sukuk issuance. There is a healthy pipeline of issuance across the world while we expect more issuers to come to the market over the next year,” said Ahsan Ali, Global Head of Islamic Origination.</div>
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Growing financing needs of sovereigns, sovereign related entities, corporates and financial institutions are expected to increase demand for capital market issuance across GCC in the future. Although a significant share of capital market issuance in the recent past have been dominated by conventional bond issuance and loan syndications, Ali expects GCC issuers to issue sukuks along with conventional bonds.</div>
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“Bulk of the further capital market issuances will be primarily driven by sovereigns and financial institutions. While sovereigns in the oil exporting countries will be seeking market funding for budget needs, the demand from financial institutions will be driven largely by liquidity and liquidity management needs,” said Ali.</div>
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Global sukuk issuance has been moderating since 2015 is expected to remain subdued this year and in 2017 according to rating agencies Moody’s and Standard & Poor’s.</div>
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The sukuk market experienced a correction in 2015 when Bank Negara Malaysia (the Malaysian central bank) decided to stop issuing short-term sukuk and switch to other instruments for liquidity management for Islamic financial institutions.</div>
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<span style="font-weight: 700;">Challenging conditions</span></div>
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New sukuk issuance volumes have remained subdued so far for the first half of 2016 at $40 billion (Dh14.7 billion). This has been driven by more challenging economic conditions in emerging markets and the GCC’s move to tap conventional liquidity from international investors, as quantitative easing has been driving yields to zero or even negative rates in various markets.</div>
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The volume of issuance in the first half of 2016 was not that encouraging, particularly when compared with conventional issuance. Muslim-majority countries, such as Malaysia, Indonesia and the GCC countries account for around 90 per cent of total sukuk issuance, this is expected to remain unchanged in the near future.</div>
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Going forward, a pickup in issuance from Bank Negara Malaysia, coupled with the deficit financing needs of the GCC members and their drive to promote Islamic finance, is expected to boost issuance.</div>
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Saudi Arabia, despite strong religious affinity and a very prominent Islamic banking sector, remains relatively underweight in both international and domestic sukuk volumes. Like Malaysia, the country enjoys a deep base of local investors, issuers, intermediaries and service providers.</div>
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Source: Gulf News/19 Nov 2016</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-39625218925584448172016-11-03T01:09:00.000-07:002016-11-19T01:09:32.288-08:00Sharjah Islamic Bank lists $500m sukuk on Nasdaq Dubai<span style="font-family: Georgia, Times New Roman, serif;"><span style="text-align: justify;">Sharjah Islamic Bank’s (SIB) $500 million sukuk was listed on Nasdaq Dubai today.</span><br style="margin: 0px; padding: 0px; text-align: justify;" /><br style="margin: 0px; padding: 0px; text-align: justify;" /><span style="text-align: justify;">Ahmad Saad, Deputy CEO of SIB, rang the opening bell to celebrate the listing.</span><br style="margin: 0px; padding: 0px; text-align: justify;" /><br style="margin: 0px; padding: 0px; text-align: justify;" /><span style="text-align: justify;">The listing adds further momentum to Dubai’s growth as the global capital of the Islamic economy and underlines Nasdaq Dubai’s stature as the largest exchange in the world for sukuk listings by value, currently standing at $43 billion.</span><br style="margin: 0px; padding: 0px; text-align: justify;" /><br style="margin: 0px; padding: 0px; text-align: justify;" /><span style="text-align: justify;">The bell-ringing took place in the presence of Abdul Wahed Al Fahim, chairman of Nasdaq Dubai, and Hamed Ali, chief executive; and senior executives of SIB. </span><br style="margin: 0px; padding: 0px; text-align: justify;" /><br style="margin: 0px; padding: 0px; text-align: justify;" /><span style="text-align: justify;">Saad said: “Our listing on the region’s international exchange supports our visibility among global and regional investors as well as providing first class regulatory standards. The sukuk was issued on September 8, 2016 and was oversubscribed by 3.2 times. It follows two earlier Sukuk listings by SIB on Nasdaq Dubai in April 2013 and April 2015, each of $500 million.”</span><br style="margin: 0px; padding: 0px; text-align: justify;" /><br style="margin: 0px; padding: 0px; text-align: justify;" /><span style="text-align: justify;">Essa Kazim, Governor of Dubai International Financial Centre, secretary general of Dubai Islamic Economy Development Centre, and chairman of Dubai Financial Market, said: “SIB’s listing demonstrates the continuing growth of Dubai as the global capital of the Islamic economy, under the initiative launched in 2013 by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minster, and Ruler of Dubai. This expansion is supported by the UAE’s long tradition of pioneering the development of Islamic finance and the depth of its expertise in the Sharia’a-compliant capital markets sector. ”</span><br style="margin: 0px; padding: 0px; text-align: justify;" /><br style="margin: 0px; padding: 0px; text-align: justify;" /><span style="text-align: justify;">Abdul Wahed Al Fahim, chairman of Nasdaq Dubai, said: “SIB’s listing underlines the close and mutually beneficial connections that the exchange enjoys with leading Islamic financial institutions. Nasdaq Dubai is committed to further enhancing its Sukuk listing procedures and framework, to ensure streamlined access to the exchange for issuers.” </span></span><br />
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<span style="font-family: Georgia, Times New Roman, serif;"><span style="text-align: justify;">SOURCE: </span><span style="margin: 0px; padding: 0px; text-align: justify;">TradeArabia News Service/3 Nov 2016</span></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-6432546706746951052016-11-02T01:04:00.000-07:002016-11-19T01:05:22.251-08:00Djibouti sees Islamic finance sector expanding, aims for sukuk<br />
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<span style="background-color: white; color: #444444;"><span style="font-family: Georgia, Times New Roman, serif;">Nov 2 (Reuters) - Djibouti expects to see new entrants in its Islamic finance sector and the government plans to work on a framework to allow the use of sukuk, or Islamic bonds, to fund infrastructure projects, its central bank governor said. </span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Djibouti, a country of less than a million people located on the Horn of Africa, is a relative newcomer to Islamic finance, having introduced sector-specific legislation in 2011, but authorities hope it can increase banking penetration in rural areas while also attracting foreign investment. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;"><span style="background-color: white; color: #444444;">The government has established a national sharia board to help oversee the sector, appointing five members to the independent body last week, central bank governor Ahmed Osman said in an interview.</span><span style="background-color: white; color: #444444;"> </span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">The move could help Islamic finance by improving consumer perception of the industry and providing greater clarity on contracts which follow religious principles such as bans on interest and gambling. </span></div>
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<span style="background-color: white; color: #444444;"><span style="font-family: Georgia, Times New Roman, serif;">The government is in discussions with the Saudi-based Islamic Development Bank to secure a technical mission to help establish a framework to issue sukuk for either the government or state-owned enterprises, said Osman. </span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">"We will be looking a lot at sukuk in the next few years," said Osman, adding that there are around 10 projects which could be financed via sukuk - ranging from railways, pipelines to new roads. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">One likely candidate is the state telecom operator due to the availability of assets to structure a sukuk, Osman said on the sidelines of the International Islamic Banking Summit Africa, which the central bank is hosting this week. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">The central bank has avoided double-taxation of Islamic contracts through temporary exemptions, but it is in discussions with the Ministry of Finance to make those exemptions permanent, Osman added. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">The central bank is also in discussions with two lenders seeking to open Islamic windows of their own. Currently three of Djibouti's 10 banks are Islamic: Saba Islamic Bank, Salaam African Bank and East Africa Bank. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">The sector is attractive due to its faster growth - estimated at around 16 percent versus 10 percent for conventional banks - but also for its low levels of bad debt. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">"Islamic finance is more secure, as there is a direct link between financing and the underlying assets," Osman said. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Islamic banks held 16.2 percent of banking assets and 14.3 percent of deposits as of September, central bank data shows. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Their non-performing loans reached 3.1 percent of total lending as of June, compared to 19.5 percent for conventional banks. </span></div>
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<span style="background-color: white; color: #444444;"><span style="font-family: Georgia, Times New Roman, serif;">SOURCE: Reuters/2 Nov 2016</span></span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-62613201920595372362016-10-28T10:55:00.000-07:002016-11-21T10:56:34.522-08:00Indonesia unveils ‘waqf’ based 'sukuk'<div style="background-color: white; box-sizing: border-box; color: rgba(0, 0, 0, 0.901961); margin-bottom: 15px; text-align: justify;">
<span style="font-family: Georgia, Times New Roman, serif;">Bank Indonesia (BI) unveiled on Thursday a <em style="box-sizing: border-box;">waqf</em> (Islamic endowment)-based <i style="box-sizing: border-box;">sukuk</i> (Islamic bond), aimed at developing social property assets to be commercially self-sustaining.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">BI Deputy Governor Hendar said the <i style="box-sizing: border-box;">sukuk</i> could further finance the development of commercial buildings such as office towers or shopping centers over <em style="box-sizing: border-box;">waqf</em> land. The coupon will be paid from the recurring income of the assets.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">"There are many prospective <em style="box-sizing: border-box;">waqf</em> plots of land in Indonesia. If we build something productive there, it will generate more economic activity," he said during the Indonesia Sharia Economic Festival in Surabaya.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Hendar highlighted the Menara 165 office tower in Jakarta, a commercial building that was built over mortmain properties under<em style="box-sizing: border-box;"> waqf</em>. <i style="box-sizing: border-box;">Sukuk</i>, he further said, could be issued by using the building as the underlying asset and the proceeds could be used to develop other assets.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">According to Muhammad Anwar Basori, BI head of the sharia economic and finance department, <em style="box-sizing: border-box;">waqf</em> land was traditionally used for social and public purposes such as cemeteries, mosques, or <em style="box-sizing: border-box;">pesantren</em> (Islamic boarding schools).</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Due to maintenance needs, the <em style="box-sizing: border-box;">waqf</em> asset manager usually collects money through spontaneous crowdfunding mechanisms such as asking for donations at the Mosque and even on the street. <i style="box-sizing: border-box;">Waqf</i>-based <i style="box-sizing: border-box;">sukuk</i> could be a solution for that, providing cash to cover maintenance costs.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">"There are 400,000 hectares of <i style="box-sizing: border-box;">waqf</i> land in Indonesia, 90 percent of which are cost centers. In Kuwait and Singapore, they have built many productive assets on <i style="box-sizing: border-box;">waqf</i> land," he said. (ags)</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">SOURCE: The Jakarta Posts/28 October 2016 </span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-17442413238949914642016-10-15T00:15:00.000-07:002016-11-19T00:15:30.296-08:00Why African Sukuk Still Faces An Uphill Battle<span style="font-family: "georgia" , "times new roman" , serif;"><span style="background-color: white; box-sizing: border-box; color: #666666; font-weight: 700; text-align: justify;"><i style="box-sizing: border-box;">Growth in African Sukuk Shows Positive Momentum, but Structural Challenges Remain</i></span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">Many African countries are working to develop their legislative and regulatory frameworks to establish Islamic finance and sukuk as a sustainable funding alternative. With Africa’s demand for infrastructure financing solutions and its significant Muslim population, such an opportunity might be well received.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">Islamic finance is already present in more than 20 African countries, with Sudan having a fully-fledged 100% Islamic financial system. However, the size of the Islamic finance industry in Africa is still small in relation to the industry as a whole. Fitch estimates around USD1bn of sukuk total issuance from the whole of Africa in 2016 compared to USD21.74bn in 1H16 across the Gulf Cooperation Council, Malaysia, Indonesia, Turkey, Singapore and Pakistan.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">When considering the reasons Why? Africa is less developed in its Islamic financial system, two common themes emerge. The first theme is the complexities of sukuk. Second is the emerging capital market infrastructure of African countries. Both factors pose significant challenges for sukuk in general, particularly in establishing a legal structure and legislation that is acceptable to governments, investors and the Sharia boards. Also, structuring sukuk compared to issuing a traditional Eurobond remains a relatively complex and time consuming process.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">Two main examples of these sukuk complexity challenges can be tax neutrality for sukuk and the ability to establish a special purpose vehicle (SPV) that acts as a single issuer for the sukuk. Although this is not Africa-specific, taxation is often challenging for sukuk due to their asset-backed/based nature. What this means is several asset transfers for a sukuk transaction, creating a dense tax load for issuers when there is not special sukuk legislation in place.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">Regulations often need to be amended to provide some sort of exemption to taxable gains on the transfer of assets and tax on rental income earned by a sukuk issuing SPV. This is also true for withholding taxes linked to the transfer of underlying assets in sukuk transactions.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">In most African countries, there are no specific comprehensive sukuk laws, though some initiatives have now materialized. One example is South Africa, which has introduced Islamic compliant financial structures with further amendments to the Taxation Act to widen the definition of sukuk. This comes following the issuance of its sovereign sukuk during 2014.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">Regarding the second theme of the nature of Africa burgeoning capital markets, there are encouraging signs. That said, the development is still modest relative to their potential and compared to more developed countries. There are numerous limitations and challenges in developing bonds and sukuk alike. However, the regional/local currency sukuk market is an area where we have seen increased sukuk activity.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">The choices in issuance are usually domestic versus international and the currency denomination of their sukuk (or bonds) are local versus foreign. These two features are often interlinked, as many issuances are denominated in the currency of the market in which they are issued.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">Africa has seen success in issuing sukuk in sub-Saharan Africa, and West Africa in particular in the West African CFA franc (XOF), which minimises exposure to FX risk for domestic issuers and investors.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">The continuation of sukuk activity this year is a positive development that allows the sukuk footprint to widen and foster greater acceptance of this instrument globally. Reuters reported that in 2016, Togo’s initial sukuk was XOF 150 billion (USD255 million). </span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">This comes after Senegal launched its second XOF200 billion (USD341.5 million) sukuk towards the end of June and Côte d’Ivoire’s second phase of its XOF300 billion (USD510 million) sukuk program. Similarly, it has been reported by Reuters that Nigeria has convened multi-agency meetings to organize its maiden sovereign sukuk issuance, expected by in 2017.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">With global financial reform, we have seen the transformation of banks’ willingness and ability to lend. This, combined with recent events and uncertainties globally like about interest rates increase and appetite of investors to emerging market, has highlighted the limitations of heavily relying on foreign investments alone and regional and local currency could make this complex process easier.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; box-sizing: border-box; color: #666666; font-weight: 700; text-align: justify;"><span style="box-sizing: border-box; color: #c00000;">Conclusion </span></span><span style="background-color: white; color: #666666; text-align: justify;">Challenges lie ahead for the sukuk market despite continued momentum. The time needed to tackle these obstacles will in turn lead to a longer time frame of Islamic finance implementation and potentially higher costs in relation to more conventional forms of funding until a standardised framework is established. </span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">However, several important trends could provide the necessary impetus for the development of Islamic finance in Africa. This includes growing government support for Islamic finance, increasing acceptance of Sukuk and Islamic finance more broadly and existing large investment and financing requirements in Africa.</span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">Furthermore, Islamic finance could enable African sovereigns to broaden their investor base while providing some diversification away from traditional Eurobond investors and towards regional/local market participants. </span><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><br style="background-color: white; box-sizing: border-box; color: #666666; text-align: justify;" /><span style="background-color: white; color: #666666; text-align: justify;">As African governments tap the Islamic finance market, it is anticipated that other issuers such as state-owned companies and African banks could, in time, benefit from this additional source of funding.</span></span><br />
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<span style="font-family: "georgia" , "times new roman" , serif;"><span style="background-color: white; color: #666666; text-align: justify;">SOURCE: ProshareNG/15 Oct 2016</span></span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-33390703046462107062016-04-22T19:13:00.000-07:002016-11-23T19:18:00.258-08:00Malaysia: Overwhelming response to sukuk<h3 class="post-title entry-title" style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 18px; font-stretch: normal; font-weight: normal; line-height: normal; margin: 0px; position: relative;">
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<span style="background-color: white; line-height: 22.8571px;"><span style="font-family: "georgia" , "times new roman" , serif;">KUALA LUMPUR: Malaysia has strengthened its position as a top investment destination with the overwhelming response to the government’s newly-priced global sukuk issuance, which reflects global investors’ continued confidence in the country.</span></span></div>
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<span style="line-height: 22.8571px;">Investors from a combined base of more than 195 accounts subscribed for the government’s 10-year and 30-year benchmark global trust certificates (wakala global sukuk), attracting an aggregate interest of more than US$6.3 billion (RM24.5 billion) and representing an oversubscription of 4.2 times.</span></div>
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><span style="line-height: 22.8571px;">Finance Ministry secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah said Malaysia remained among the faster-growing economies in the region and continued to successfully pursue fiscal consolidation while maintaining monetary and financial stability.</span></span></div>
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"></span><br />
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><span style="line-height: 22.8571px;"><br /></span></span></div>
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><span style="line-height: 22.8571px;">“This is a remarkable achievement as demonstrated by the tight pricing and excellent response to this landmark sukuk,” he said in a statement yesterday.</span></span></div>
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><span style="line-height: 22.8571px;">The government, via special purpose entity Malaysia Sukuk Global Bhd, has successfully priced the 10-year and 30-year benchmark sukuk papers at 3.18 and 4.08 per cent, respectively.</span></span></div>
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"></span><br />
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><span style="line-height: 22.8571px;"><br /></span></span></div>
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><span style="line-height: 22.8571px;">The new sukuk format uses non-physical assets to underpin an agency-based transaction known as wakala, instead of the traditional use of physical assets (commodity murabaha). </span></span></div>
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><span style="line-height: 22.8571px;">The sukuk used vouchers representing entitlement to travel units and syariah-compliant shares, the statement said.</span></span></div>
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><span style="line-height: 22.8571px;">This could serve as a model for other sovereigns which have previously faced some difficulty in identifying and transferring tangible assets, such as buildings, for use in sukuk issuance.</span></span></div>
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<span style="background-color: white; line-height: 22.8571px;"><span style="font-family: "georgia" , "times new roman" , serif;">The wakala sukuk are expected to be assigned ratings of “A-” by Fitch Ratings and Standard and Poor’s Ratings Services, and “A3” by Moody’s Investors Services.</span></span></div>
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<span style="background-color: white; line-height: 22.8571px;"><span style="font-family: "georgia" , "times new roman" , serif;">The issuance is Malaysia’s fifth global sukuk, after previous issuances in 2002, 2010, 2011 and 2015.</span></span></div>
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><span style="line-height: 22.8571px;">It was priced after a roadshow across global financial centres, including Hong Kong, Singapore, Abu Dhabi, Dubai, London and New York, besides Kuala Lumpur.</span></span></div>
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<span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"><span style="line-height: 22.8571px;">CIMB, HSBC, J.P. Morgan and Maybank acted as the bookrunners and lead managers for the offering.</span></span></div>
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<span style="color: blue; font-family: "georgia" , "times new roman" , serif;"><span style="background-color: white; font-family: "georgia" , "times new roman" , serif;"></span></span><br />
<span style="font-family: "georgia" , "times new roman" , serif;"><br style="background-color: #e6e7e8; box-sizing: border-box; color: #333333; line-height: 22.8571px;" />SOURCE: New Straits Times Online / 22 April 2016</span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-80316142752736807962016-04-22T11:22:00.000-07:002016-11-21T11:23:55.643-08:00Malaysia: Overwhelming response to sukuk<div style="text-align: justify;">
<span style="background-color: white; line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">KUALA LUMPUR: Malaysia has strengthened its position as a top investment destination with the overwhelming response to the government’s newly-priced global sukuk issuance, which reflects global investors’ continued confidence in the country.</span></span></div>
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<span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">Investors from a combined base of more than 195 accounts subscribed for the government’s 10-year and 30-year benchmark global trust certificates (wakala global sukuk), attracting an aggregate interest of more than US$6.3 billion (RM24.5 billion) and representing an oversubscription of 4.2 times.</span></span></div>
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<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">Finance Ministry secretary-general Tan Sri Dr Mohd Irwan Serigar Abdullah said Malaysia remained among the faster-growing economies in the region and continued to successfully pursue fiscal consolidation while maintaining monetary and financial stability.</span></span></span></div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /><span style="background-color: white;"></span></span><br />
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<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;"><br /></span></span></span></div>
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<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">“This is a remarkable achievement as demonstrated by the tight pricing and excellent response to this landmark sukuk,” he said in a statement yesterday.</span></span></span></div>
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<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;"><br /></span></span></span></div>
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<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">The government, via special purpose entity Malaysia Sukuk Global Bhd, has successfully priced the 10-year and 30-year benchmark sukuk papers at 3.18 and 4.08 per cent, respectively.</span></span></span></div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /><span style="background-color: white;"></span></span><br />
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<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;"><br /></span></span></span></div>
<div style="text-align: justify;">
<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">The new sukuk format uses non-physical assets to underpin an agency-based transaction known as wakala, instead of the traditional use of physical assets (commodity murabaha). </span></span></span></div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /><span style="background-color: white;"></span></span><br />
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<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;"><br /></span></span></span></div>
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<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">The sukuk used vouchers representing entitlement to travel units and syariah-compliant shares, the statement said.</span></span></span></div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /><span style="background-color: white;"></span></span><br />
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<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;"><br /></span></span></span></div>
<div style="text-align: justify;">
<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">This could serve as a model for other sovereigns which have previously faced some difficulty in identifying and transferring tangible assets, such as buildings, for use in sukuk issuance.</span></span></span></div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span><br />
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<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
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<span style="background-color: white; line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">The wakala sukuk are expected to be assigned ratings of “A-” by Fitch Ratings and Standard and Poor’s Ratings Services, and “A3” by Moody’s Investors Services.</span></span></div>
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<div style="text-align: justify;">
<span style="background-color: white; line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">The issuance is Malaysia’s fifth global sukuk, after previous issuances in 2002, 2010, 2011 and 2015.</span></span></div>
<span style="font-family: Georgia, Times New Roman, serif;"><span style="background-color: white;"></span><br /></span>
<div style="text-align: justify;">
<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;"><br /></span></span></span></div>
<div style="text-align: justify;">
<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">It was priced after a roadshow across global financial centres, including Hong Kong, Singapore, Abu Dhabi, Dubai, London and New York, besides Kuala Lumpur.</span></span></span></div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /><span style="background-color: white;"></span></span><br />
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<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;"><br /></span></span></span></div>
<div style="text-align: justify;">
<span style="background-color: white;"><span style="line-height: 22.8571px;"><span style="font-family: Georgia, Times New Roman, serif;">CIMB, HSBC, J.P. Morgan and Maybank acted as the bookrunners and lead managers for the offering.</span></span></span></div>
<span style="font-family: Georgia, Times New Roman, serif;"><br />SOURCE: News Straits Times Online / 22 April 2016</span>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-36668663059353551112016-04-13T11:29:00.000-07:002016-11-21T11:29:29.422-08:00Oman: New regulation on sukuk to provide transparency<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; text-align: justify;">
<span style="font-family: Georgia, "Times New Roman", serif; line-height: 32px;">Muscat: Oman’s market watchdog Capital Market Authority (CMA) on Wednesday announced its new sukuk regulation, which includes stipulation on establishing a trustee structure and an LLC company as a special purpose vehicle for issuing sukuk.</span></div>
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The regulation, which is effective from Wednesday, also allows structure of the sukuk subject to the approval of respective Sharia Supervisory Board issuer and the choice of the board is left to the issuer.</div>
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The regulation made rating optional for the issuer and there is no restriction on the sukuk amount to be raised based on the company’s capital, said a CMA release.</div>
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The new sukuk regulation will provide clarity and transparency to the market players, while providing protection to investors in a sukuk transaction. In addition, it has been drafted to provide flexibilities and spur innovation for the market players.</div>
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“The issuance of this new sukuk regulation forms an integral part of the overall strategy of the CMA to enable the capital market to play its vital role as a fundraising platform for companies in the economic development of Oman, particularly in the fixed-income market, where sukuk forms an important element to further develop Oman’s Islamic capital market,” said Abdullah Salim Al Salmi, executive president of the CMA.</div>
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“In addition, the new sukuk regulation will form a key milestone in the evolution of the sukuk market in Oman and hopefully spur further Sukuk issuances particularly from the private sector players in order to meet their development and funding needs, while diversifying the financing base and risk away from the traditional banking sector,” he added.</div>
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“Further, sukuk issuances will also provide an essential liquidity management instrument and investment avenue for both Islamic and conventional financial institutions, investment funds and takaful/insurance operators in Oman. Hence, not only providing a wider investor base of both conventional and Sharia-compliant investors, but also attracting the required foreign investments into the country via the foreign investors. We are confident that this new regulation will have a positive impact on Oman’s capital market and the economy.”</div>
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<span style="line-height: 32px;"><br /></span></div>
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The sukuk regulation is being issued subsequent to the amendments made to the Capital Market Law under Royal Decree No. 59/2014 on December 10, 2014, which provides the CMA the authority to regulate all sukuk issuances in Oman and any Special Purpose Vehicle or Company (SPV) being incorporated for the issuance of a sukuk, including the tax and fee exemption status provided for the SPV.</div>
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<span style="line-height: 32px;"><br /></span></div>
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This sukuk regulation would complement the existing bond regulatory framework, which are currently in place in the Commercial Companies Law and Executive Regulation of the Capital Market Law.</div>
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<div style="font-family: Arial, Tahoma, Helvetica, FreeSans, sans-serif; font-size: 15px; text-align: justify;">
All jurisdictions have specific and separate sukuk regulations, particularly in the Gulf Cooperation Council, with many just having a conventional bond regulatory framework with some additions made on the Sharia requirements.</div>
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In a short span of three years, besides the establishment of two Islamic banks and six Islamic windows, the Islamic financial market in Oman has seen the launch of the new Muscat Securities Market (MSM) Sharia Index with 30 Sharia-compliant listed companies on the MSM, three Sharia-compliant investment funds, the first Oman sovereign sukuk and also the first corporate sukuk, and the establishment of two takaful operators including the issuance of the new takaful law.</div>
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<span style="font-family: Georgia, "Times New Roman", serif;">SOURCE: Times Of Oman / 13 April 2016</span></div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-2979198780117183024.post-67478235481394279082011-06-12T11:32:00.000-07:002016-11-21T11:34:21.579-08:00Malaysia's Value Proposition - Sukuk<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgr3WCaXqqoqXk-28-mSduNAwdfkEsfW301vNUpy3DV1tBQr8YKy31FH4RWH0XJV3KguhOkCyGPpTDEvP0-EfC_On7L5VG7OIcRwXybJM88I-cGmD5i6tYl96AJyF9CP4O9pbEAOX3Pd-un/s1600/malaysia_location_from_world_map.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="303" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgr3WCaXqqoqXk-28-mSduNAwdfkEsfW301vNUpy3DV1tBQr8YKy31FH4RWH0XJV3KguhOkCyGPpTDEvP0-EfC_On7L5VG7OIcRwXybJM88I-cGmD5i6tYl96AJyF9CP4O9pbEAOX3Pd-un/s400/malaysia_location_from_world_map.jpg" width="400" /></a></div>
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<span style="font-family: Georgia, Times New Roman, serif;"><span class="Apple-style-span" style="line-height: 18px;">Malaysia's in-depth experience and solid fundamentals in Islamic finance developed over 30 years, coupled with its strength in the domestic sukuk market, offers strong exciting value propositions to government agencies, multinational corporations and multilateral development banks/ financial institutions across the world to originate sukuk out of Malaysia.</span><span class="Apple-style-span" style="line-height: 18px;"> </span></span></div>
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<span class="Apple-style-span" style="line-height: 18px;"><span class="Apple-style-span" style="font-weight: bold;"><span style="font-family: Georgia, Times New Roman, serif;">Facilitative Environment </span></span></span></div>
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<span class="Apple-style-span" style="line-height: 18px;"><span style="font-family: Georgia, Times New Roman, serif;">Malaysia provides a facilitative framework for sukuk issuance; both for local and international issuers. In addition to issuing ringgit sukuk, the current issuance framework allows for issuers to issue a non-ringgit sukuk in Malaysia:</span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Facilitative approval process for issuance of Ringgit-denominated sukuk:</span></div>
<ul style="margin: 0px;">
<li style="margin: 0px; text-align: justify;"><span style="font-family: Georgia, Times New Roman, serif;">Deemed approval granted to sovereigns, quasi-sovereigns, Multilateral Development Banks (MDBs) and Multilateral Financial Institutions (MFIs) rated "AAA".</span></li>
<li style="margin: 0px; text-align: justify;"><span style="font-family: Georgia, Times New Roman, serif;">14 working days to foreign Multi-National Corporations (MNCs) and foreign corporations.</span></li>
</ul>
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</ul>
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<span style="font-family: Georgia, Times New Roman, serif;">Facilitative approval process for issuance of non-ringgit denominated sukuk:</span></div>
<ul style="margin: 0px;">
<li style="margin: 0px; text-align: justify;"><span style="font-family: Georgia, Times New Roman, serif;">Deemed approval granted to sovereigns, quasi-sovereigns, MDBs and MFIs rated "BBB" on foreign rating scale.</span></li>
<li style="margin: 0px; text-align: justify;"><span style="font-family: Georgia, Times New Roman, serif;">Governing laws of Malaysia, England or United States may be used for bond documentation.</span></li>
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</ul>
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<span style="font-family: Georgia, Times New Roman, serif;">For both ringgit and non-ringgit denominated sukuk:</span></div>
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<li style="margin: 0px; text-align: justify;"><span style="font-family: Georgia, Times New Roman, serif;">Both resident and non-resident issuers are free to utilise proceeds from the issuance onshore and offshore.</span></li>
<li style="margin: 0px; text-align: justify;"><span style="font-family: Georgia, Times New Roman, serif;">The issuers are also free to hedge to the full amount of the underlying commitment.</span></li>
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<span class="Apple-style-span" style="line-height: 18px;"><span style="font-family: Georgia, Times New Roman, serif;">Malaysia's facilitative environment encompasses a sound infrastructure platform, consisting of the Electronic Trading Platform (ETP) and the Real-time Electronic Transfer of Funds and Securities (RENTAS) system. These systems allow for an efficient platform for the trading of bonds, with a high level of post-trade transparency and market liquidity. For global investments, flexibility is also accorded for foreign investors to leverage on international clearing and settlement systems.</span></span></div>
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<span class="Apple-style-span" style="line-height: 18px;"><span class="Apple-style-span" style="line-height: normal;"><span style="font-family: Georgia, Times New Roman, serif;"><span class="Apple-style-span" style="line-height: 18px;">Malaysia has an active secondary market, which gives investors the option to either hold sukuk investments until maturity or to take profit. The secondary market enables greater trading activity and attracts more investors including foreign-owned corporations, who are continuously tapping the market for funding.</span><span class="Apple-style-span" style="line-height: 18px;"> </span></span></span></span></div>
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<span class="Apple-style-span" style="line-height: normal;"><span style="font-family: Georgia, Times New Roman, serif;"><span class="Apple-style-span" style="line-height: 18px;">This eventually augments the depth and liquidity of the sukuk market. Investors will benefit from the wide array and increasing size of sukuk transactions as they look towards diversifying their asset portfolios.</span><span class="Apple-style-span" style="line-height: 18px;"> </span></span></span></div>
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<span class="Apple-style-span" style="line-height: normal;"><span style="font-family: Georgia, Times New Roman, serif;"><span class="Apple-style-span" style="line-height: 18px;">In this aspect, Malaysia offers well-developed value propositions, which enables a dynamic scenario that benefits both issuers and investors.</span><span class="Apple-style-span" style="line-height: 18px;"> </span></span></span></div>
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<span class="Apple-style-span" style="font-weight: bold; line-height: 18px;"><span style="font-family: Georgia, Times New Roman, serif;">Strategic Location </span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Malaysia, with its strategic location serves as a link between the East and West. The country is well-positioned to facilitate cross flow of funds and greater economic linkages between South East Asia and the Middle East. Foreign players who wish to seize the opportunity of these largely untapped and fast growing markets will find Malaysia an excellent gateway for this purpose. </span></div>
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<span class="Apple-style-span" style="line-height: 18px;"><span style="font-family: Georgia, Times New Roman, serif;">As the economies of these regions continue expanding, Malaysia is expected to play a pivotal role as a regional financial hub and gateway, particularly for transnational investments and the sourcing of funds. </span></span></div>
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<span class="Apple-style-span" style="line-height: 18px;"><span style="font-family: Georgia, Times New Roman, serif;">Through its various global economic inter linkages, Malaysia provides financial institutions with access to the financial pipelines of the region to tap surplus funds and the wealth of high net worth investors. </span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Liberal Foreign Exchange Administration (FEA) Rules </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Malaysia's liberalised foreign exchange administration rules enhance Malaysia's competitiveness and business efficiency, while promoting financial and economic stability.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">The relaxation in rulings was made in tandem with the readiness of the Malaysian economy to support the country's growth and competitiveness, whilst creating a conducive business environment for international financial institutions.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Apart from enhancing Malaysia's competitiveness and business efficiency, the liberal FEA rules enables greater trade in foreign currencies. With regards to sukuk issuances, the relaxed FEA rules enable foreign entities to raise ringgit and foreign currency-denominated funds from Malaysia. The international issuers can issue multi-currency sukuk and have the flexibility to swap domestic currency funding into other currencies.</span></div>
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<span class="Apple-style-span" style="font-weight: bold;"><span style="font-family: Georgia, Times New Roman, serif;">Tax Neutrality</span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Tax neutrality has been accorded to Islamic finance instruments and transactions executed to fulfill Shariah requirements. There is no additional stamp duty and tax payment incurred in the usage of Islamic products. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Malaysia's tax neutrality framework is to promote level playing field between conventional and Islamic financial products. Tax neutrality reduces the cost of doing business in Islamic finance, thereby contributing to the overall competitiveness and spurs the development of Islamic finance.</span></div>
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<span class="Apple-style-span" style="font-weight: bold; line-height: 18px;"><span style="font-family: Georgia, Times New Roman, serif;">Diversity of International and Local Financial Institutions</span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Malaysia's diversity of market intermediaries consists of investment banks, local and foreign Islamic banks, brokers and fund managers who engage in a number of activities ranging from underwriting complex financial transactions to advising on sophisticated transaction structures.</span></div>
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<span class="Apple-style-span" style="line-height: 18px;"><span style="font-family: Georgia, Times New Roman, serif;">Most of these intermediaries have participated in Malaysia's many notable sukuk issuances. As such, they possess a proven track record and in-depth experience. Capitalising on the inherent strengths of Malaysia's intermediaries enables issuers to benefit from a smoother issuance process while reducing costs. The reputation of these intermediaries adds further credibility to the issuance.</span></span></div>
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<span class="Apple-style-span" style="line-height: 18px;"><span style="font-family: Georgia, Times New Roman, serif;">Malaysia's market intermediaries are also internationally recognised for their innovative capability in structuring sukuk. This is attributed to their expert use of various Islamic principles or a combination of principles to produce truly customised sukuk offerings.</span></span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Adopt Global Legal and Regulatory Best Practices</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Malaysia's legal framework caters for Islamic finance matters. There is a dedicated judge at the High Court level for Islamic finance matters. The Kuala Lumpur Regional Centre for Arbitration has specific capabilities to deal with Islamic contract matters. This legal framework enables the enforceability of Shariah-based contracts for Islamic finance while providing governance and legal redress for Islamic financial institutions. It also provides for strong investor protection.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">In particular, the Capital Market Services Act 2007 (CMSA) defines the parameters for permitted capital market activities in Malaysia, while reinforcing the protection framework and promoting international best practices among financial institutions. These and other such regulatory guidelines have been instrumental in providing industry consistency and clarity for the Islamic Capital Market (ICM) in Malaysia. In addition, Malaysia's regulatory guidelines have also set benchmarks for other countries in developing their own Islamic Capital Markets (ICM). </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">The legal and regulatory framework is constantly reviewed taking into consideration latest market, products and Shariah issues to ensure continuous development in the ICM.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">Well-Developed Shariah Governance Framework</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">The Securities Commission Malaysia (SC) has established a Shariah Advisory Council (SAC) to advise the SC on issues related to the Islamic Capital Market (ICM) to ensure consistency with Islamic principles. The approach was taken, by recognising the importance of Shariah compliance in the Islamic financial system, which possesses distinctive characteristics when compared to the conventional system.</span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">The SAC is also responsible for analysing specific issues related to the operations of ICM to provide guidance and advise to investors, the government and industry. </span></div>
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<span style="font-family: Georgia, Times New Roman, serif;">SOURCE: MIFC</span></div>
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