Author Topic: Malaysia retains lead in Islamic finance  (Read 1794 times)

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Malaysia retains lead in Islamic finance
« on: October 26, 2012, 09:21:50 PM »
August 22, 2012 The Star

PETALING JAYA: Malaysia continues to lead in Islamic finance as Singapore strives to make inroads into the sector, according to a report in the Singapore Business Times.

HSBC Amanah (M) Bhd chief executive officer and Global Markets Amanah managing director Rafe Haneef was quoted by the daily as saying Malaysia had a large volume of Islamic investors looking for syariah-compliant investments like sukuk compared with the Singapore market.

“Along with Islamic investors, Malaysia has a large number of Muslim-owned companies, most of which are looking for syariah-compliant financing and sukuk issuance. Again, there is not a high demand for such financing in the Singapore corporate environment,” Rafe said.

Malaysia accounts for 60% of global sukuk deals.

Rafe said the global sukuk market was expected to expand to US$44bil (RM137bil) this year. For the first half of 2012, the global sukuk market was worth US$20.5bil (RM64bil), up from US$15bil (RM46.7bil) a year earlier.

According to a statement from the Securities Commission (SC), fund-raising activities in the second quarter continued to be robust with the regulator receiving a total 56 applications for equity-related proposals and issuances of private debt securities (PDS) – three times the applications received in the first quarter.

The SC said a total 42, or 75%, were PDS applications, and the balance were for equity-related proposals.

The regulator said the debt market in Malaysia remained active with the number of approved PDS applications in the second quarter increasing to 24 compared with 16 in the first quarter. The total amount of funds approved to be raised from ringgit-denominated PDS issues also increased by 4.9% to RM23.01bil versus RM21.94bil in the first quarter.

The SC said that at end-June, the total amount of bonds outstanding stood at RM941bil, reflecting the continued growth of the Malaysian bond market. The figure included US$165.2bil (RM515bil) in sukuk outstanding, which represents two-thirds of the total sukuk outstanding globally of US$243.4bil (RM758.2bil).

In 2011, corporate bond issuances in the Malaysian capital market totalled RM70bil. In the first half of 2012, total corporate bond issuances reached RM66bil, including PLUS Bhd’s RM30bil sukuk earlier this year – the single largest corporate sukuk in the world.

Just last week, Celcom Axiata Bhd announced it had successfully priced its sukuk issuance of RM5bil in nominal value, of which RM3bil received a final book of RM10bil via bookbuilding process. Celcom said the RM5bil sukuk was the largest rated sukuk murabahah issuance based on a tawarruq arrangement in the Malaysian debt capital market to date.

The Singapore Business Times also quoted bankers as saying Singapore was hobbled by a lack of domestic market for Islamic finance products, while Middle East investors were still US dollar-based and conservative.

The situation appeared to be improving when in 2010 Khazanah sold S$1.5bil sukuk in Singapore, and Sabana, the world’s largest syariah-compliant real estate investment trust (Reit), raised S$664mil through its initial public offering.

Since then, the Islamic finance landscape there has been rather barren. It said Singapore appeared to be missing out on one of the fastest-growing financial markets, with Islamic finance growing at an estimated 15% to 20% a year.

Islamic banking assets with commercial banks globally will hit US$1.1 trillion (RM3.43 trillion) in 2012, up a third from US$826bil (RM2.6 trillion) in 2010, according to figures from the 2011 Ernst & Young World Islamic Banking Competitiveness Report.

The business daily said another problem for Singapore was that conservative Middle Eastern investors tended to invest only in familiar companies and preferred to make those investments in US dollars.

Maybank Singapore’s head of Islamic banking Mohd Ismail Hussein was quoted as saying the expected demand from Middle East investors did not materialise because of economic and liquidity issues at home.
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Offline lim_90

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Re: Malaysia retains lead in Islamic finance
« Reply #1 on: December 05, 2018, 04:19:53 PM »
Nice one  :clap: :clap: :clap: :cash: