Tuesday, October 28, 2008
Chinese chamber of commerce promotes Halal seminar
To promote the involvement of Malaysian companies in the halal industry, the chinese chamber of commerce and industry KL,Selangor and Klang organise a seminar on Development Prospects of Halal Industry in Malaysia and Islamic Banking Facilities on Nov.8 2008 at Seng Peng Hall from 9.30am to 1.30.
80 million muslims in China alone,Halal products a hit at China expo
Halal products a hit at China expo
By Chan Cheng Tuan Published: 2008/10/24
NANNING: Malaysia's halal products have received positive response from potential buyers at the 5th China-Asean Expo (CAEXPO) which was launched here on Wednesday. Malaysia External Trade Development Corporation deputy chief executive officer (promotion) Dr Wong Lai Sum said there had been many queries from potential buyers including the Walmart chain and French companies.
"It is not only for Walmart's China market but for the Asia-Pacific region," she told reporters at the expo.
Wong said CAEXPO was a good platform for Malaysia to explain and promote its halal products, adding that there was a big global market for such products.
Malaysia's export of halal products is valued at US$3.32 billion (RM11.85 billion) a year. Wong said this was only a drop in the ocean as the global trade in halal products amounted to US$2.1 trillion (RM7.5 trillion)
Of the nearly 100 Malaysian companies at CAEXPO, 27 are dealing with halal products comprising consumables such as confectionery and non-consumables including cosmetics.
Wong said Malaysia wanted to show that the country's halal standard was not only about adherence to religious requirements but was also based on strict hygienic practices.
"We want to show that halal products are not only for Muslims but they are for everybody as they are safe from the source to the delivery," she said.
Wong said Chinese and Malaysian firms could have joint ventures and collaborate in terms of the halal certification. For instance, China could export its product with Malaysian halal certification.
There is a huge market in China for halal products as more than 80 million of its 1.3 billion population are Muslims.
Wong said apart from the halal products, there had also been encouraging response to the Multimedia Super Corridor.
Malaysia is promoting Cyberjaya and the MSC at the expo. Among others, companies are told of the benefits of being accorded MSC status.
"There have been many queries and the Chinese are impressed with what we have achieved so far," said Wong.
She said the Chinese were interested to enter Malaysian market as it was a way for them to penetrate the Asean and West Asian markets.
Wong also expressed satisfaction with the response to the Malaysian pavilion so far. Since the launch of the expo on Wednesday, about 1,000 people had visited the various booths at the pavilion daily.
CAEXPO is co-sponsored by the Ministry of Commerce of China and its Asean counterparts as well as the Asean Secretariat, and organised by the government of Guangxi Zhuang Autonomous Region of China.
Held annually in Nanning, it is aimed at spurring the setting up of the China-Asean Free Trade Area and serving as a platform for China and Asean to enhance their bilateral economic and trading cooperation.
By Chan Cheng Tuan Published: 2008/10/24
NANNING: Malaysia's halal products have received positive response from potential buyers at the 5th China-Asean Expo (CAEXPO) which was launched here on Wednesday. Malaysia External Trade Development Corporation deputy chief executive officer (promotion) Dr Wong Lai Sum said there had been many queries from potential buyers including the Walmart chain and French companies.
"It is not only for Walmart's China market but for the Asia-Pacific region," she told reporters at the expo.
Wong said CAEXPO was a good platform for Malaysia to explain and promote its halal products, adding that there was a big global market for such products.
Malaysia's export of halal products is valued at US$3.32 billion (RM11.85 billion) a year. Wong said this was only a drop in the ocean as the global trade in halal products amounted to US$2.1 trillion (RM7.5 trillion)
Of the nearly 100 Malaysian companies at CAEXPO, 27 are dealing with halal products comprising consumables such as confectionery and non-consumables including cosmetics.
Wong said Malaysia wanted to show that the country's halal standard was not only about adherence to religious requirements but was also based on strict hygienic practices.
"We want to show that halal products are not only for Muslims but they are for everybody as they are safe from the source to the delivery," she said.
Wong said Chinese and Malaysian firms could have joint ventures and collaborate in terms of the halal certification. For instance, China could export its product with Malaysian halal certification.
There is a huge market in China for halal products as more than 80 million of its 1.3 billion population are Muslims.
Wong said apart from the halal products, there had also been encouraging response to the Multimedia Super Corridor.
Malaysia is promoting Cyberjaya and the MSC at the expo. Among others, companies are told of the benefits of being accorded MSC status.
"There have been many queries and the Chinese are impressed with what we have achieved so far," said Wong.
She said the Chinese were interested to enter Malaysian market as it was a way for them to penetrate the Asean and West Asian markets.
Wong also expressed satisfaction with the response to the Malaysian pavilion so far. Since the launch of the expo on Wednesday, about 1,000 people had visited the various booths at the pavilion daily.
CAEXPO is co-sponsored by the Ministry of Commerce of China and its Asean counterparts as well as the Asean Secretariat, and organised by the government of Guangxi Zhuang Autonomous Region of China.
Held annually in Nanning, it is aimed at spurring the setting up of the China-Asean Free Trade Area and serving as a platform for China and Asean to enhance their bilateral economic and trading cooperation.
Sunday, October 19, 2008
Malaysia slams global 'casino' principles
Malaysia slams global 'casino' principles
By Adie Suri Zulkefli Published: 2008/10/20
THE world financial system, which operates on the "casino" principles, must be changed to ensure stability in the international economy, thus allowing developing nations to implement their development programmes.
Second Finance Minister Tan Sri Nor Mohamed Yakcop said the casino principles have proven to only benefit a small circle of investors, while creating a huge damage to the affected nations.
Citing the 1997 Asian financial crisis, he said currency speculators made several billions of profit from the crisis, but the damage they created in the region was worth hundreds of billions.
Nor Mohamed said the current crisis in the US is motivated by greed and fear.
"The US economy makes so much profit from complex structured financial products created by their banks," he said in Tasek Gelugor, Penang, yesterday. "These products have no genuine value. However, due to greed, they invested heavily without knowing what they are paying for," he added.
He added that when things started to go wrong, the US realised that the wealth was just a worthless paper and their greed shifted into extreme fear.
Nor Mohamed said investors then started panic-selling and refused to invest even in those shares and projects that have genuine prospects and values.
"At this point, they are no longer rationale as they are motivated by fear and the economy begins to slip into recession," he said.
By Adie Suri Zulkefli Published: 2008/10/20
THE world financial system, which operates on the "casino" principles, must be changed to ensure stability in the international economy, thus allowing developing nations to implement their development programmes.
Second Finance Minister Tan Sri Nor Mohamed Yakcop said the casino principles have proven to only benefit a small circle of investors, while creating a huge damage to the affected nations.
Citing the 1997 Asian financial crisis, he said currency speculators made several billions of profit from the crisis, but the damage they created in the region was worth hundreds of billions.
Nor Mohamed said the current crisis in the US is motivated by greed and fear.
"The US economy makes so much profit from complex structured financial products created by their banks," he said in Tasek Gelugor, Penang, yesterday. "These products have no genuine value. However, due to greed, they invested heavily without knowing what they are paying for," he added.
He added that when things started to go wrong, the US realised that the wealth was just a worthless paper and their greed shifted into extreme fear.
Nor Mohamed said investors then started panic-selling and refused to invest even in those shares and projects that have genuine prospects and values.
"At this point, they are no longer rationale as they are motivated by fear and the economy begins to slip into recession," he said.
'Islamic finance to play bigger role in global stage'
'Islamic finance to play bigger role in global stage'
Published: 2008/10/20
ISLAMIC finance is growing at an average of 15 per cent annually and gaining acceptance from the broader population in many countries, according to Institut Bank-Bank Malaysia chief executive officer Dr Mohd Kamal Khir.
"The total Islamic financial assets now exceed US$1 trillion (RM3.5 trillion), about fivefold its magnitude five years ago," Mohd Kamal said in conjunction with the Sixth International Islamic Finance Conference which opened in Kuala Lumpur last week.
According to him, the adoption of mainstream financial instruments by the Islamic finance community will see the sector playing a bigger role in global finance over the next decade.
"Such a development will not only further support the acceptance of Islamic finance, but also offer vast business opportunities made possible by the huge amount of Islamic funding available," he said.
"Players are quickly expanding their range of offerings by adopting some of the financial instruments available in the mainstream financial markets," said Monash University's Sunway campus chair of accounting and finance, Professor Bala Shanmugam.
He also said that the conference has emerged as an important international platform for the sharing of knowledge in Islamic finance. - Bernama
Published: 2008/10/20
ISLAMIC finance is growing at an average of 15 per cent annually and gaining acceptance from the broader population in many countries, according to Institut Bank-Bank Malaysia chief executive officer Dr Mohd Kamal Khir.
"The total Islamic financial assets now exceed US$1 trillion (RM3.5 trillion), about fivefold its magnitude five years ago," Mohd Kamal said in conjunction with the Sixth International Islamic Finance Conference which opened in Kuala Lumpur last week.
According to him, the adoption of mainstream financial instruments by the Islamic finance community will see the sector playing a bigger role in global finance over the next decade.
"Such a development will not only further support the acceptance of Islamic finance, but also offer vast business opportunities made possible by the huge amount of Islamic funding available," he said.
"Players are quickly expanding their range of offerings by adopting some of the financial instruments available in the mainstream financial markets," said Monash University's Sunway campus chair of accounting and finance, Professor Bala Shanmugam.
He also said that the conference has emerged as an important international platform for the sharing of knowledge in Islamic finance. - Bernama
Islamic banking escapes fallout of global financial crunch
Agence France-Presse - 10/20/2008 1:18 AM GMT
Islamic banking escapes fallout of global financial crunch
Islamic banking has largely escaped the fallout from the global financial crisis, thanks to rules that forbid the sort of risky business that is felling mainstream institutions.
But experts say that because of its heavy reliance on property investments and private equity, the booming 1.0 trillion dollar global industry could be hit if the turmoil worsens and real assets start to crumble.
"In the current financial turmoil, it is interesting to note that Islamic financing may have prevented a majority of the mess created by the conventional banking and financial institutions," Kuwait Finance House said in a report.
"The outlook for Islamic financing is bright and will likely take the lead in terms of providing funding for major projects as the conventional banking system reevaluates its business model."
The rules of Islamic banking and finance -- which incorporate principles of sharia or Islamic law -- read like a how-to guide on avoiding the kind of disaster that is currently gripping world markets.
Islamic law prohibits the payment and collection of interest, which is seen as a form of gambling, so highly complex instruments such as derivatives and other creative accounting practices are banned.
Transactions must be backed by real assets -- not shady repackaged subprime mortgages -- and because risk is shared between the bank and the depositor there is an incentive for the institutions to ensure the deal is sound.
Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.
"Islamic banking has, thus far, remained positive, despite the current challenging global financial environment," said Zeti Akhtar Aziz, the central bank governor of Malaysia, which is Southeast Asia's leader in Islamic banking.
Zeti said this month that because of the slowing global economy, plans for Islamic "sukuk" bonds had been postponed or scrapped by companies including Kuwait's Abyaar Real Estate Development Co. and Malaysia's Perisai Petroleum.
And Jennifer Chang, a partner at Pricewaterhouse Coopers in the Malaysian capital Kuala Lumpur, said that given the extent of the global crisis, Islamic banks may suffer damage despite their strong position.
"Islamic banks, especially in the Middle East, got heavily into private equity and real estate investments, and a lot of loans may be backed by properties. So if the property market goes down, there will be an impact," she said.
"If a borrower is not able to pay then the bank will foreclose and the question is -- can you sell the property in the market and at what value? These are issues which all banks can face."
There have been calls for the conventional banking industry to take a leaf out of the book of Islamic finance, which also shuns investments in gaming, alcohol and pornography in favour of ethical investments.
Influential Sunni cleric Sheikh Yusuf al-Qaradawi earlier this month called on Muslims to take advantage of the turmoil to build an economic system compatible with Islamic principles.
"The collapse of the capitalist system based on usury and paper and not on goods traded on the market is proof that it is in crisis and shows that Islamic economic philosophy is holding up," said the Egyptian-born, Qatar-based cleric.
In recent years the sector has broken out of its niche and been embraced by mainstream banks. As well as basic bank deposits and investment accounts, it has expanded into areas including equity funds, bonds and Islamic hedge funds.
Abhishek Kumar, a senior research analyst at Financial Insights, a company under market research and analysis firm International Data Corp (IDC), said recent events may further boost the sector.
"More and more institutions will be interested in providing Islamic services to diversify their risk portfolio," he said, while warning that in the current financial storm there were no absolutely safe harbours.
"We're not really sure what the real extent of the impact is, and whether we've passed the worst of it or not, But the extent is not going to be as bad as in the mainstream sector," he said.
Islamic banking escapes fallout of global financial crunch
Islamic banking has largely escaped the fallout from the global financial crisis, thanks to rules that forbid the sort of risky business that is felling mainstream institutions.
But experts say that because of its heavy reliance on property investments and private equity, the booming 1.0 trillion dollar global industry could be hit if the turmoil worsens and real assets start to crumble.
"In the current financial turmoil, it is interesting to note that Islamic financing may have prevented a majority of the mess created by the conventional banking and financial institutions," Kuwait Finance House said in a report.
"The outlook for Islamic financing is bright and will likely take the lead in terms of providing funding for major projects as the conventional banking system reevaluates its business model."
The rules of Islamic banking and finance -- which incorporate principles of sharia or Islamic law -- read like a how-to guide on avoiding the kind of disaster that is currently gripping world markets.
Islamic law prohibits the payment and collection of interest, which is seen as a form of gambling, so highly complex instruments such as derivatives and other creative accounting practices are banned.
Transactions must be backed by real assets -- not shady repackaged subprime mortgages -- and because risk is shared between the bank and the depositor there is an incentive for the institutions to ensure the deal is sound.
Investors have a right to know how their funds are being used, and the sector is overseen by dedicated supervisory boards as well as the usual national regulatory authorities.
"Islamic banking has, thus far, remained positive, despite the current challenging global financial environment," said Zeti Akhtar Aziz, the central bank governor of Malaysia, which is Southeast Asia's leader in Islamic banking.
Zeti said this month that because of the slowing global economy, plans for Islamic "sukuk" bonds had been postponed or scrapped by companies including Kuwait's Abyaar Real Estate Development Co. and Malaysia's Perisai Petroleum.
And Jennifer Chang, a partner at Pricewaterhouse Coopers in the Malaysian capital Kuala Lumpur, said that given the extent of the global crisis, Islamic banks may suffer damage despite their strong position.
"Islamic banks, especially in the Middle East, got heavily into private equity and real estate investments, and a lot of loans may be backed by properties. So if the property market goes down, there will be an impact," she said.
"If a borrower is not able to pay then the bank will foreclose and the question is -- can you sell the property in the market and at what value? These are issues which all banks can face."
There have been calls for the conventional banking industry to take a leaf out of the book of Islamic finance, which also shuns investments in gaming, alcohol and pornography in favour of ethical investments.
Influential Sunni cleric Sheikh Yusuf al-Qaradawi earlier this month called on Muslims to take advantage of the turmoil to build an economic system compatible with Islamic principles.
"The collapse of the capitalist system based on usury and paper and not on goods traded on the market is proof that it is in crisis and shows that Islamic economic philosophy is holding up," said the Egyptian-born, Qatar-based cleric.
In recent years the sector has broken out of its niche and been embraced by mainstream banks. As well as basic bank deposits and investment accounts, it has expanded into areas including equity funds, bonds and Islamic hedge funds.
Abhishek Kumar, a senior research analyst at Financial Insights, a company under market research and analysis firm International Data Corp (IDC), said recent events may further boost the sector.
"More and more institutions will be interested in providing Islamic services to diversify their risk portfolio," he said, while warning that in the current financial storm there were no absolutely safe harbours.
"We're not really sure what the real extent of the impact is, and whether we've passed the worst of it or not, But the extent is not going to be as bad as in the mainstream sector," he said.
US, European leaders to hold summits on financial crisis
US, European leaders to hold summits on financial crisis
--------------------------------------------------------------------------------
19th Oct 2008
US and European leaders have agreed to hold a series of summits to reform the global financial system to make it more resilient and ensure continued prosperity in the world.
US President George W. Bush, French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso said in a joint statement released after their talks that the first summit would be held in the United States "soon after the US elections" on November 4.
The world leaders will "review progress being made to address the current crisis and to seek agreement on principles of reform needed to avoid a repetition and assure global prosperity in the future," it added.
Later summits "would be designed to implement agreement on specific steps to be taken to meet those principles," the statement read.
The first of the summits will likely be held in November, but Tony Fratto, a White House spokesman, did not give a date.
According to the joint statement, the three leaders "had a very positive discussion" about continuing to coordinate steps needed to solve the financial crisis.
Sarkozy and Barroso arrived Saturday for a three hour meeting with Bush at the presidential retreat at Camp David in Maryland, outside the US capital.
Just before the meeting, UN Secretary General Ban Ki-moon said he backed the idea of a summit by early December at the latest.
Sarkozy, whose country currently holds the rotating presidency of the European Union, is seeking a bold relaunching of the international financial system. The French president warned that it was urgent to stabilize the marketplace "as swiftly as possible by coming up with answers."
"Once calm has been restored, we must avoid at all costs that those who have led us to where we are today should be allowed to do so once again," he said at Camp David.
Bush , meanwhile, stressed the importance of preserving "the foundations of democratic capitalism -- the commitment to free markets, free enterprise and free trade."
Fallout from the crisis grew as fresh job losses were blamed on the turmoil. Bank chiefs faced a backlash, and stocks Friday closed a tumultuous week with more wild swings.
Key US data showed starts on building new homes slumped an additional 6.3 percent in September to the lowest level since the 1991 recession, the latest evidence of the burst housing bubble that shook the US economy and triggered the global financial crisis.
Unemployment has risen across Europe and the United States, with key sectors such as car makers badly hit. Analysts forecast worsening economic conditions in most advanced economies.
Fratto said that a location for the first summit had not been determined, though Sarkozy recommended New York, where the crisis began.
Fratto said that Bush, Sarkozy and Barroso proposed a series of summits because it was "too ambitions" to think that the crisis could be solved in one single meeting.
The European leaders are seeking to overhaul the Bretton Woods system that has governed international finance since the end of World War II, and launch a new system.
"You have a lot of people talking about Bretton Woods," said Fratto. "Bretton Woods was a three week conference that involved 44 countries at a time when there were a lot fewer countries in the world," he said.
The first summit would be "to discuss the current financial crisis and also to set forth principles that would guide the future follow on," he said.
Of course by then participants "would be interested in the views and the input of whoever the president-elect is," he added.
--------------------------------------------------------------------------------
19th Oct 2008
US and European leaders have agreed to hold a series of summits to reform the global financial system to make it more resilient and ensure continued prosperity in the world.
US President George W. Bush, French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso said in a joint statement released after their talks that the first summit would be held in the United States "soon after the US elections" on November 4.
The world leaders will "review progress being made to address the current crisis and to seek agreement on principles of reform needed to avoid a repetition and assure global prosperity in the future," it added.
Later summits "would be designed to implement agreement on specific steps to be taken to meet those principles," the statement read.
The first of the summits will likely be held in November, but Tony Fratto, a White House spokesman, did not give a date.
According to the joint statement, the three leaders "had a very positive discussion" about continuing to coordinate steps needed to solve the financial crisis.
Sarkozy and Barroso arrived Saturday for a three hour meeting with Bush at the presidential retreat at Camp David in Maryland, outside the US capital.
Just before the meeting, UN Secretary General Ban Ki-moon said he backed the idea of a summit by early December at the latest.
Sarkozy, whose country currently holds the rotating presidency of the European Union, is seeking a bold relaunching of the international financial system. The French president warned that it was urgent to stabilize the marketplace "as swiftly as possible by coming up with answers."
"Once calm has been restored, we must avoid at all costs that those who have led us to where we are today should be allowed to do so once again," he said at Camp David.
Bush , meanwhile, stressed the importance of preserving "the foundations of democratic capitalism -- the commitment to free markets, free enterprise and free trade."
Fallout from the crisis grew as fresh job losses were blamed on the turmoil. Bank chiefs faced a backlash, and stocks Friday closed a tumultuous week with more wild swings.
Key US data showed starts on building new homes slumped an additional 6.3 percent in September to the lowest level since the 1991 recession, the latest evidence of the burst housing bubble that shook the US economy and triggered the global financial crisis.
Unemployment has risen across Europe and the United States, with key sectors such as car makers badly hit. Analysts forecast worsening economic conditions in most advanced economies.
Fratto said that a location for the first summit had not been determined, though Sarkozy recommended New York, where the crisis began.
Fratto said that Bush, Sarkozy and Barroso proposed a series of summits because it was "too ambitions" to think that the crisis could be solved in one single meeting.
The European leaders are seeking to overhaul the Bretton Woods system that has governed international finance since the end of World War II, and launch a new system.
"You have a lot of people talking about Bretton Woods," said Fratto. "Bretton Woods was a three week conference that involved 44 countries at a time when there were a lot fewer countries in the world," he said.
The first summit would be "to discuss the current financial crisis and also to set forth principles that would guide the future follow on," he said.
Of course by then participants "would be interested in the views and the input of whoever the president-elect is," he added.
'Overhaul world financial system'
2008/10/19
'Overhaul world financial system'
By : Adie Suri Zulkefli
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Tan Sri Nor Mohamed Yakcop serving ‘air batu campur’ to young guests at his Hari Raya Aidilfitri open house in Teluk Air Tawar yesterday.
BUTTERWORTH: Ten years ago, Malaysia called for reforms in the global financial system but this was rejected by the international community.
Today, as fears of a worldwide recession mounts, European leaders are talking about changing the system.
Second Finance Minister Tan Sri Nor Mohamed Yakcop said, even though Malaysia had managed its economy well, the country would not be spared from the impact of the global financial crisis.
"We have built strong economic fundamentals but we can't say we are immune to the impact of the global crisis in the long run," said Nor Mohamed, who is also member of parliament for Tasek Gelugor, at his Hari Raya Aidilfitri open house in Taman Air Tawar Indah, Teluk Air Tawar.
He said Malaysia would continue to call for reforms in the global financial system.
He said it was time for the developed and developing nations to work together.
"We need to cooperate to formulate a new global financial infrastructure that is just and transparent, and do away with double standards and hypocrisy."
Nor Mohamed said the new framework should protect nations that managed their economies wisely from the impact of global crises.
He said the world reserves used by the United States to keep its economy going included the reserves of Asian countries and oil producing nations. He said the bulk of the reserves which were used to buy treasury notes, bills and bonds issued by western nations had been depleted by the crisis.
"We are proposing that these reserves be invested in developing infrastructure in Asean nations so that the region can reap the benefit by growing our economies together."
Nor Mohamed said Asean needed about US$50 billion (RM176 billion) for infrastructure development annually.
Malaysia will be hosting a financial infrastructure seminar on Nov 10 for leaders from the region to discuss the issue.
'Overhaul world financial system'
By : Adie Suri Zulkefli
Email to friend Print article
Tan Sri Nor Mohamed Yakcop serving ‘air batu campur’ to young guests at his Hari Raya Aidilfitri open house in Teluk Air Tawar yesterday.
BUTTERWORTH: Ten years ago, Malaysia called for reforms in the global financial system but this was rejected by the international community.
Today, as fears of a worldwide recession mounts, European leaders are talking about changing the system.
Second Finance Minister Tan Sri Nor Mohamed Yakcop said, even though Malaysia had managed its economy well, the country would not be spared from the impact of the global financial crisis.
"We have built strong economic fundamentals but we can't say we are immune to the impact of the global crisis in the long run," said Nor Mohamed, who is also member of parliament for Tasek Gelugor, at his Hari Raya Aidilfitri open house in Taman Air Tawar Indah, Teluk Air Tawar.
He said Malaysia would continue to call for reforms in the global financial system.
He said it was time for the developed and developing nations to work together.
"We need to cooperate to formulate a new global financial infrastructure that is just and transparent, and do away with double standards and hypocrisy."
Nor Mohamed said the new framework should protect nations that managed their economies wisely from the impact of global crises.
He said the world reserves used by the United States to keep its economy going included the reserves of Asian countries and oil producing nations. He said the bulk of the reserves which were used to buy treasury notes, bills and bonds issued by western nations had been depleted by the crisis.
"We are proposing that these reserves be invested in developing infrastructure in Asean nations so that the region can reap the benefit by growing our economies together."
Nor Mohamed said Asean needed about US$50 billion (RM176 billion) for infrastructure development annually.
Malaysia will be hosting a financial infrastructure seminar on Nov 10 for leaders from the region to discuss the issue.
Sunday, October 5, 2008
Safety net for bank depositors
2008/10/05
Safety net for bank depositors
By : TAN CHOE CHOE
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Malaysia Deposit Insurance Corporation chief executive Jean Pierre Sabourin
With news about banks failing in other parts of the world, should we worry about our money in the bank? Malaysia Deposit Insurance Corporation chief executive Jean Pierre Sabourin tells TAN CHOE CHOE that our deposits are quite safe and our accounts are insured by the government — at least up to RM60,000 each
Q: French President Nicolas Sarkozy recently said millions of people around the world are worried about their savings. Is it the same here?
A: No. But this is an issue that's being addressed around the world every day.
We've seen, in the last couple of weeks, the concerns about AIG, bank failures in the United States and the bank run in Hong Kong... Depositors want to know "how do I protect my money?"
As to concerns about Malaysian banks, the question is not whether they are going to fail because our banks are very robust, very profitable.
They're insulated from events in the US because local banks are not involved in the US markets.
But the public should be aware of what's going on, especially if they follow CNN or other media and see the concerns of depositors around the world.
Q: So is the public making more calls expressing concern over the global economic situation?
A: Our approach to deposit insurance is to inform the public. The public must understand the kind of protection they enjoy so that they are confident about the banking system.
We did more advertising last month, so there have definitely been more calls.
While most were about how deposit insurance works and its features, we had a few callers asking if local banks were in trouble, with bank failures around the world.
We'd like to think that one of the reasons we are not seeing panic here is because the public has a lot of confidence in our banks, in Bank Negara and the Malaysia Deposit Insurance Corporation (PIDM). We are, as a financial system, managing our affairs appropriately.
In the last three years, we've been building our system and practices and approaches so that in case there is a problem in any of our member banks, we can go in quickly and fix it. We don't wait until banks fail.
We work very closely with Bank Negara to ensure our depositors are protected.
We try to meet our statutory responsibility, which is to inform the public of the protection afforded them.
Q: What is deposit insurance and how does it benefit me?
A: The deposit insurance system was introduced in September 2005. It's an initiative of the Financial Sector Master Plan to enhance depositor protection in Malaysia.
It is a form of protection or guarantee for money placed in member institutions, usually banks and financial institutions.
Membership in the deposit insurance system is mandatory under the PIDM Act 2005 for all commercial and Islamic banks, both domestic and foreign.
In the unlikely event of a bank failure, depositors will be promptly reimbursed up to the coverage limit of RM60,000.
Q: Why does it cover up to RM60,000 only?
A: Don't only look at the RM60,000. Look at the total coverage.
You're getting RM60,000 per depositor, per member institution. There are 36 banks -- 22 conventional and 14 Islamic.
You can put RM60,000 in each of the 36 banks. You can also have a joint account with your family members or friends and that's insured separately.
That means you can also put RM60,000 in joint accounts in 36 different banks. Or if you set up a trust account, you can do so in each of the 36 banks. In addition, Islamic deposits are insured separately.
If you're a small business, not incorporated, you get RM60,000 coverage. If you are an incorporated company, you get another RM60,000.
When Bank Negara did a study in 2004 and 2005, it found RM60,000 covers more than 90 per cent of the accounts but only 32 per cent of the value.
So the ones not fully covered are large accounts belonging to big corporations and businesses, and those with more money.
But that's a small number because not everybody's rich. It's really corporations and businesses that hold a lot of money in the banking system.
And when we're looking at deposit protection, we look at the issue of what is called moral hazard.
In a nutshell, we're trying to balance between having large depositors to provide market discipline and protecting the small unsophisticated depositors.
The big players don't care about the RM60,000 limit when they've got hundreds of millions of ringgit. So they monitor the performance of the banks because they've got more at stake.
We shouldn't expect the average depositor to do that because few people really understand complex financial services.
At PIDM, we act as proxy for all the small depositors and monitor the banks.
Q: What authority is vested with PIDM?
A: The PIDM Act 2005 spells out our mandate, which is to administer a deposit insurance system efficiently and effectively, promote confidence in the financial system and to promote sound risk management in our financial institutions.
For example, we have put in place this year, a new differential premium systems whereby banks having higher risk profiles pay higher premiums.
This gives banks financial incentives to fix any problems that they may have -- so the onus is on our member banks to act quickly to save money.
Q: So should I worry about the safety of my accounts now?
A: It depends. I want to emphasise that I am not saying you should have all your money in bank deposits.
It depends on your risk appetite. You may park some money in savings accounts, some in real estate, some in stocks. You have to look at spreading your risks.
But if protecting your bank deposits is your major concern, you should find out how it works and how to protect your money.
Q: My spouse and I have a joint-chequing account and individual savings accounts at the same bank. How are we covered?
A: In the same member bank, you and your spouse are individually protected up to RM60,000 on each of your individual savings accounts.
In addition, both of you enjoy separate protection of up to RM60,000 for the joint account. Therefore, the total deposit insurance protection in this instance is RM180,000.
Q: What if I hold an Islamic banking account?
A: Eligible Islamic deposits placed in Islamic banks are also protected by PIDM.
Furthermore, a depositor holding both conventional and Islamic deposits within the same member bank or group will enjoy separate coverage of up to RM60,000 on the conventional and Islamic deposits respectively.
Q: What happens to my deposit if two member banks merge?
A: You will continue to enjoy separate insurance coverage for a period of two years for each of your deposit accounts after the date of the merger, or upon maturity of the deposit (if it's a term deposit) or until you withdraw the deposit, whichever is earlier.
What we would do is to make sure you are informed that there is a merger and what happens to your deposit insurance coverage.
Q: Do joint accounts and trust accounts enjoy separate deposit insurance coverage?
A: Yes. Joint accounts enjoy separate deposit insurance protection limit, provided the records of the member bank disclose the names of the joint account holders.
Trust accounts also enjoy separate deposit insurance protection limit, provided the information on trust account beneficiaries and their respective interests in the deposit is disclosed on the records of the member bank.
Q: How can I maximise protection for my deposits in a single bank?
A: Each account is protected up to the RM60,000 limit.
For example, John holds an individual account; has a joint account with his wife; has a joint account with his daughter and wife; has another under the name of his legal firm; and another under his trading company.
Each of these accounts is covered up to the RM60,000 maximum. So John, with his five accounts, would be covered up to RM300,000.
Q: Can I buy additional insurance for my deposits if it's more than RM60,000?
A: No.
Q: How do I make a deposit insurance claim?
A: In the unlikely event of a member bank failure, PIDM will announce when (within three months) and how you will be reimbursed.
Q: If I walk into a bank now and open an account, how will I know if the product is insured by PIDM or not?
A: We're coming up with a new information regulation. It'll be in place by year-end.
We've been working with the banks for a year now, going through their products, deposits and documentation to determine which product is insurable and which isn't.
So when a depositor opens an account, the bank has to give him a brochure informing him whether the product qualifies for a deposit insurance.
If the bank is selling you a unit trust, they have to tell you it's not insured.
Q: Do I have to fill up any form to get back my money when a bank fails?
A: No. We'll do it all for you.
But we are proactive and do not wait until a bank fails to act. Our job is to move in quickly and fix any problems before a bank fails.
Q: Do you take over the bank?
A: When a bank is showing signs of problems, Bank Negara will inform us and we'll send in our team to check the extent of the problems. We'll look at the options available to resolve the problems and calculate the costs.
We can ask shareholders to put in more capital, sell off the bank's assets, or look for a willing buyer.
If there isn't, we may need to liquidate the bank.
Our board of directors, which includes the governor of Bank Negara and the secretary-general of the Ministry of Finance, will look at the least-cost option.
If we look at (American bank) Wachovia, their depositors today are now depositors of Citibank -- and that happened overnight.
That's one of the methods we could use -- take over the bank and sell it to somebody else.
Q: How much premium has PIDM collected so far?
A: About RM300 million. On average, we collect about RM100 million a year. That's less than one per cent of the annual profits of the banks.
It's minimal. The reason for that is because we don't have any expectations of failures.
Q: How does PIDM monitor its members to ensure they are practising prudent financial management?
A: We get the supervisory reports from Bank Negara and we will assess all the risks.
We have a risk-assessment model which we implemented this year.
Drawing on the supervisory reports, we will do tracking, trend-analysis and look at the key ratios.
If there's any problem, we'll discus it with Bank Negara and they'll meet with the banks or we'll meet with the banks directly to check the problem
Safety net for bank depositors
By : TAN CHOE CHOE
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Malaysia Deposit Insurance Corporation chief executive Jean Pierre Sabourin
With news about banks failing in other parts of the world, should we worry about our money in the bank? Malaysia Deposit Insurance Corporation chief executive Jean Pierre Sabourin tells TAN CHOE CHOE that our deposits are quite safe and our accounts are insured by the government — at least up to RM60,000 each
Q: French President Nicolas Sarkozy recently said millions of people around the world are worried about their savings. Is it the same here?
A: No. But this is an issue that's being addressed around the world every day.
We've seen, in the last couple of weeks, the concerns about AIG, bank failures in the United States and the bank run in Hong Kong... Depositors want to know "how do I protect my money?"
As to concerns about Malaysian banks, the question is not whether they are going to fail because our banks are very robust, very profitable.
They're insulated from events in the US because local banks are not involved in the US markets.
But the public should be aware of what's going on, especially if they follow CNN or other media and see the concerns of depositors around the world.
Q: So is the public making more calls expressing concern over the global economic situation?
A: Our approach to deposit insurance is to inform the public. The public must understand the kind of protection they enjoy so that they are confident about the banking system.
We did more advertising last month, so there have definitely been more calls.
While most were about how deposit insurance works and its features, we had a few callers asking if local banks were in trouble, with bank failures around the world.
We'd like to think that one of the reasons we are not seeing panic here is because the public has a lot of confidence in our banks, in Bank Negara and the Malaysia Deposit Insurance Corporation (PIDM). We are, as a financial system, managing our affairs appropriately.
In the last three years, we've been building our system and practices and approaches so that in case there is a problem in any of our member banks, we can go in quickly and fix it. We don't wait until banks fail.
We work very closely with Bank Negara to ensure our depositors are protected.
We try to meet our statutory responsibility, which is to inform the public of the protection afforded them.
Q: What is deposit insurance and how does it benefit me?
A: The deposit insurance system was introduced in September 2005. It's an initiative of the Financial Sector Master Plan to enhance depositor protection in Malaysia.
It is a form of protection or guarantee for money placed in member institutions, usually banks and financial institutions.
Membership in the deposit insurance system is mandatory under the PIDM Act 2005 for all commercial and Islamic banks, both domestic and foreign.
In the unlikely event of a bank failure, depositors will be promptly reimbursed up to the coverage limit of RM60,000.
Q: Why does it cover up to RM60,000 only?
A: Don't only look at the RM60,000. Look at the total coverage.
You're getting RM60,000 per depositor, per member institution. There are 36 banks -- 22 conventional and 14 Islamic.
You can put RM60,000 in each of the 36 banks. You can also have a joint account with your family members or friends and that's insured separately.
That means you can also put RM60,000 in joint accounts in 36 different banks. Or if you set up a trust account, you can do so in each of the 36 banks. In addition, Islamic deposits are insured separately.
If you're a small business, not incorporated, you get RM60,000 coverage. If you are an incorporated company, you get another RM60,000.
When Bank Negara did a study in 2004 and 2005, it found RM60,000 covers more than 90 per cent of the accounts but only 32 per cent of the value.
So the ones not fully covered are large accounts belonging to big corporations and businesses, and those with more money.
But that's a small number because not everybody's rich. It's really corporations and businesses that hold a lot of money in the banking system.
And when we're looking at deposit protection, we look at the issue of what is called moral hazard.
In a nutshell, we're trying to balance between having large depositors to provide market discipline and protecting the small unsophisticated depositors.
The big players don't care about the RM60,000 limit when they've got hundreds of millions of ringgit. So they monitor the performance of the banks because they've got more at stake.
We shouldn't expect the average depositor to do that because few people really understand complex financial services.
At PIDM, we act as proxy for all the small depositors and monitor the banks.
Q: What authority is vested with PIDM?
A: The PIDM Act 2005 spells out our mandate, which is to administer a deposit insurance system efficiently and effectively, promote confidence in the financial system and to promote sound risk management in our financial institutions.
For example, we have put in place this year, a new differential premium systems whereby banks having higher risk profiles pay higher premiums.
This gives banks financial incentives to fix any problems that they may have -- so the onus is on our member banks to act quickly to save money.
Q: So should I worry about the safety of my accounts now?
A: It depends. I want to emphasise that I am not saying you should have all your money in bank deposits.
It depends on your risk appetite. You may park some money in savings accounts, some in real estate, some in stocks. You have to look at spreading your risks.
But if protecting your bank deposits is your major concern, you should find out how it works and how to protect your money.
Q: My spouse and I have a joint-chequing account and individual savings accounts at the same bank. How are we covered?
A: In the same member bank, you and your spouse are individually protected up to RM60,000 on each of your individual savings accounts.
In addition, both of you enjoy separate protection of up to RM60,000 for the joint account. Therefore, the total deposit insurance protection in this instance is RM180,000.
Q: What if I hold an Islamic banking account?
A: Eligible Islamic deposits placed in Islamic banks are also protected by PIDM.
Furthermore, a depositor holding both conventional and Islamic deposits within the same member bank or group will enjoy separate coverage of up to RM60,000 on the conventional and Islamic deposits respectively.
Q: What happens to my deposit if two member banks merge?
A: You will continue to enjoy separate insurance coverage for a period of two years for each of your deposit accounts after the date of the merger, or upon maturity of the deposit (if it's a term deposit) or until you withdraw the deposit, whichever is earlier.
What we would do is to make sure you are informed that there is a merger and what happens to your deposit insurance coverage.
Q: Do joint accounts and trust accounts enjoy separate deposit insurance coverage?
A: Yes. Joint accounts enjoy separate deposit insurance protection limit, provided the records of the member bank disclose the names of the joint account holders.
Trust accounts also enjoy separate deposit insurance protection limit, provided the information on trust account beneficiaries and their respective interests in the deposit is disclosed on the records of the member bank.
Q: How can I maximise protection for my deposits in a single bank?
A: Each account is protected up to the RM60,000 limit.
For example, John holds an individual account; has a joint account with his wife; has a joint account with his daughter and wife; has another under the name of his legal firm; and another under his trading company.
Each of these accounts is covered up to the RM60,000 maximum. So John, with his five accounts, would be covered up to RM300,000.
Q: Can I buy additional insurance for my deposits if it's more than RM60,000?
A: No.
Q: How do I make a deposit insurance claim?
A: In the unlikely event of a member bank failure, PIDM will announce when (within three months) and how you will be reimbursed.
Q: If I walk into a bank now and open an account, how will I know if the product is insured by PIDM or not?
A: We're coming up with a new information regulation. It'll be in place by year-end.
We've been working with the banks for a year now, going through their products, deposits and documentation to determine which product is insurable and which isn't.
So when a depositor opens an account, the bank has to give him a brochure informing him whether the product qualifies for a deposit insurance.
If the bank is selling you a unit trust, they have to tell you it's not insured.
Q: Do I have to fill up any form to get back my money when a bank fails?
A: No. We'll do it all for you.
But we are proactive and do not wait until a bank fails to act. Our job is to move in quickly and fix any problems before a bank fails.
Q: Do you take over the bank?
A: When a bank is showing signs of problems, Bank Negara will inform us and we'll send in our team to check the extent of the problems. We'll look at the options available to resolve the problems and calculate the costs.
We can ask shareholders to put in more capital, sell off the bank's assets, or look for a willing buyer.
If there isn't, we may need to liquidate the bank.
Our board of directors, which includes the governor of Bank Negara and the secretary-general of the Ministry of Finance, will look at the least-cost option.
If we look at (American bank) Wachovia, their depositors today are now depositors of Citibank -- and that happened overnight.
That's one of the methods we could use -- take over the bank and sell it to somebody else.
Q: How much premium has PIDM collected so far?
A: About RM300 million. On average, we collect about RM100 million a year. That's less than one per cent of the annual profits of the banks.
It's minimal. The reason for that is because we don't have any expectations of failures.
Q: How does PIDM monitor its members to ensure they are practising prudent financial management?
A: We get the supervisory reports from Bank Negara and we will assess all the risks.
We have a risk-assessment model which we implemented this year.
Drawing on the supervisory reports, we will do tracking, trend-analysis and look at the key ratios.
If there's any problem, we'll discus it with Bank Negara and they'll meet with the banks or we'll meet with the banks directly to check the problem
Al Rajhi event offers convenience, fast processing
Al Rajhi event offers convenience, fast processing
Published: 2008/03/28
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AL RAJHI Bank's Weekend Banking Extravaganza starting tomorrow, held for the second year, is expected to be a hit among customers for its convenience and fast processing.
During the event, customers can apply for loan packages like Home Financing-i and Personal Financing-i and open accounts like Current Account-i, Savings Account-i or Mudarabah Savings-i.
Savings account and current account customers can also receive their respective ATM Visa Debit Card-i and cheque books in less than half an hour.
Customers will also get to participate in "The 60 Minutes Challenge" promotion, which entitles them to receive a RM100 shopping voucher if Al Rajhi Bank cannot process their application successfully within 60 minutes. Customers will be notified via SMS.
"The response to our inaugural Weekend Banking Extravaganza held last year was way above expectation.
"We're very pleased as this indicates that the banking weekend has huge potential and generates very good returns," chief executive officer Ahmad Rehman said in a statement.
He said based on the positive feedback, the bank plans to make Weekend Banking Extravaganza part of its culture.
"For this second Weekend Banking Extravaganza, I invite everyone to visit any of our 18 branches, except at Wisma Selangor Dredging, to secure your mortgage or personal financing needs, as well as to receive banking services," said Ahmad Rehman.
Published: 2008/03/28
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AL RAJHI Bank's Weekend Banking Extravaganza starting tomorrow, held for the second year, is expected to be a hit among customers for its convenience and fast processing.
During the event, customers can apply for loan packages like Home Financing-i and Personal Financing-i and open accounts like Current Account-i, Savings Account-i or Mudarabah Savings-i.
Savings account and current account customers can also receive their respective ATM Visa Debit Card-i and cheque books in less than half an hour.
Customers will also get to participate in "The 60 Minutes Challenge" promotion, which entitles them to receive a RM100 shopping voucher if Al Rajhi Bank cannot process their application successfully within 60 minutes. Customers will be notified via SMS.
"The response to our inaugural Weekend Banking Extravaganza held last year was way above expectation.
"We're very pleased as this indicates that the banking weekend has huge potential and generates very good returns," chief executive officer Ahmad Rehman said in a statement.
He said based on the positive feedback, the bank plans to make Weekend Banking Extravaganza part of its culture.
"For this second Weekend Banking Extravaganza, I invite everyone to visit any of our 18 branches, except at Wisma Selangor Dredging, to secure your mortgage or personal financing needs, as well as to receive banking services," said Ahmad Rehman.
KFH offers wealth management products
KFH offers wealth management products
By Chong Pooi Koon Published: 2008/03/14
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The wealth management products are likely to cater to rich customers with RM5 million worth of liquid assets
KUWAIT Finance House (Malaysia) Bhd has started offering wealth management products in partnership with information technology firm FIRIUM Solutions (M) Sdn Bhd and Islamic financial planning consultant Amanie Business Solutions Sdn Bhd.
Managing director Salman Younis said the wealth management business is initiated in line with the bank's retail banking expansion.
KFH plans to open a branch in Johor in April this year with another opening soon in Penang to reach more retail customers. This will add to the three branches in the Klang Valley.
Its wealth management products are likely to cater to rich customers with some RM5 million worth of liquid assets.
These will be introduced in three phases. The first phase which started last month, offers unit trust and Bancatakaful. The second phase of structured product and wasiat, or will-writing will follow soon while the final phase will see the launch of Islamic financial planning services.
"Drawing on KFH's 30 years experience, we will work with our business partners and customers to create innovative solutions to manage, preserve and develop wealth for now and the future generations," Salman said in Kuala Lumpur yesterday.
He said the bank chose to work with FIRIUM as the company has introduced innovative IT solutions to many local and international financial institutions.
FIRIUM is a leading solutions provider in Asia Pacific to the financial services, retail and distribution and telecommunications industries, he said.
Amanie Business Solutions is also not new to KFH. Amanie's chief executive officer Dr Mohd Daud Bakar and his team of qualified consultants, who are well-versed in syariah and Islamic banking, are often invited to conduct training for KFH's senior management.
Dr Mohd Daud is also the chairman of Bank Negara Malaysia's Syariah Advisory Council.
By Chong Pooi Koon Published: 2008/03/14
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The wealth management products are likely to cater to rich customers with RM5 million worth of liquid assets
KUWAIT Finance House (Malaysia) Bhd has started offering wealth management products in partnership with information technology firm FIRIUM Solutions (M) Sdn Bhd and Islamic financial planning consultant Amanie Business Solutions Sdn Bhd.
Managing director Salman Younis said the wealth management business is initiated in line with the bank's retail banking expansion.
KFH plans to open a branch in Johor in April this year with another opening soon in Penang to reach more retail customers. This will add to the three branches in the Klang Valley.
Its wealth management products are likely to cater to rich customers with some RM5 million worth of liquid assets.
These will be introduced in three phases. The first phase which started last month, offers unit trust and Bancatakaful. The second phase of structured product and wasiat, or will-writing will follow soon while the final phase will see the launch of Islamic financial planning services.
"Drawing on KFH's 30 years experience, we will work with our business partners and customers to create innovative solutions to manage, preserve and develop wealth for now and the future generations," Salman said in Kuala Lumpur yesterday.
He said the bank chose to work with FIRIUM as the company has introduced innovative IT solutions to many local and international financial institutions.
FIRIUM is a leading solutions provider in Asia Pacific to the financial services, retail and distribution and telecommunications industries, he said.
Amanie Business Solutions is also not new to KFH. Amanie's chief executive officer Dr Mohd Daud Bakar and his team of qualified consultants, who are well-versed in syariah and Islamic banking, are often invited to conduct training for KFH's senior management.
Dr Mohd Daud is also the chairman of Bank Negara Malaysia's Syariah Advisory Council.
Bank Negara sets up syariah research academy
Bank Negara sets up syariah research academy
Published: 2008/03/28
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BANK Negara Malaysia (BNM) has set up the International Syariah Research Academy for Islamic Finance (Isra) to promote applied research in the area of syariah and Islamic finance.
A repository of knowledge for syariah views or fatwas, it will undertake studies on contemporary issues in Islamic financial industry.
"Isra will contribute towards strengthening human capital development in the areas of syariah and provide a platform for greater engagement amongst practitioners, scholars, regulators and academicians via research and dialogues, both in the domestic and international environment," the central bank said in a statement.
Isra also aims to promote innovation and dynamism into new boundaries of Islamic finance.
Isra, which will be part of the International Centre for Education in Islamic Finance (Inceif), will have a Council of Scholars, comprising eminent local and international syariah scholars.
Dr Mohamad Akram Laldin will be appointed executive director of Isra.
Currently, attached to the International Islamic University Malaysia, Mohamad Akram has done extensive research in the area of Islamic finance and has been actively involved in the global development of Islamic finance by being a member of several syariah committees.
Published: 2008/03/28
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BANK Negara Malaysia (BNM) has set up the International Syariah Research Academy for Islamic Finance (Isra) to promote applied research in the area of syariah and Islamic finance.
A repository of knowledge for syariah views or fatwas, it will undertake studies on contemporary issues in Islamic financial industry.
"Isra will contribute towards strengthening human capital development in the areas of syariah and provide a platform for greater engagement amongst practitioners, scholars, regulators and academicians via research and dialogues, both in the domestic and international environment," the central bank said in a statement.
Isra also aims to promote innovation and dynamism into new boundaries of Islamic finance.
Isra, which will be part of the International Centre for Education in Islamic Finance (Inceif), will have a Council of Scholars, comprising eminent local and international syariah scholars.
Dr Mohamad Akram Laldin will be appointed executive director of Isra.
Currently, attached to the International Islamic University Malaysia, Mohamad Akram has done extensive research in the area of Islamic finance and has been actively involved in the global development of Islamic finance by being a member of several syariah committees.
Prudential seeks tie-ups with foreign Islamic banks
Prudential seeks tie-ups with foreign Islamic banks
BY Jeeva Arulapalam Published: 2008/03/31
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PRUDENTIAL Fund Management Bhd (PFMB) is looking to tie up with three foreign Islamic banks operating in Malaysia, to offer Islamic funds, says its top official.
Distributing PFMB's products to onshore clients through these Islamic foreign banks is part of PFMB efforts to become the Prudential Group's syariah fund management hub.
"The first step is for our products to be accepted by these banks and distributed locally before we look to package it for distribution in the Middle East," chief executive officer Mark Toh told Business Times in an interview.
PFMB, which manages all syariah investments and insurance funds for the Prudential Group, is currently finalising a distribution agreement with one of the three Middle Eastern banks based here.
As at January 31 2008, its total onshore syariah funds under management were RM704.5 million.
Syariah investment director Zulkifli Ishak said the main challenge in attracting the Islamic banks to distribute their products was the different interpretations of syariah-compliant products domestically and in the Middle East.
"These banks look at the Malaysian products and their own interpretation before deciding on how to integrate the products with their respective interpretations," said Zulkifli.
The fund management company is also in the process of developing expertise to manage global sukuk funds from Malaysia.
"Hardly anyone offers it because there is very little expertise worldwide to manage such funds. So, we are building the resources now in terms of selecting fund managers, putting up a system to manage it and collating research on sukuk issuances," said Toh.
He said PFMB will depend on the group's overall network for research materials to structure products and portfolios customised for their clientele.
"Since we already have the global equity expertise, we are now focusing on the global sukuk expertise. Our asset management licence allows us to manage global sukuk funds and we should get this out in the next couple of months," said Toh.
PFMB currently manages offshore syariah funds amounting to RM249 million as at January 31 2008, consisting of fund mandates from Indonesia and Dubai.
"We are working towards managing more mandates coming from overseas, while locally we continue to manufacture innovative syariah products," said Toh, adding that PFMB will focus on launching more products in Indonesia, Malaysia and the Middle East.
Prudential was also recently voted best Islamic fund manager by the readers of Islamic Finance News.
BY Jeeva Arulapalam Published: 2008/03/31
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PRUDENTIAL Fund Management Bhd (PFMB) is looking to tie up with three foreign Islamic banks operating in Malaysia, to offer Islamic funds, says its top official.
Distributing PFMB's products to onshore clients through these Islamic foreign banks is part of PFMB efforts to become the Prudential Group's syariah fund management hub.
"The first step is for our products to be accepted by these banks and distributed locally before we look to package it for distribution in the Middle East," chief executive officer Mark Toh told Business Times in an interview.
PFMB, which manages all syariah investments and insurance funds for the Prudential Group, is currently finalising a distribution agreement with one of the three Middle Eastern banks based here.
As at January 31 2008, its total onshore syariah funds under management were RM704.5 million.
Syariah investment director Zulkifli Ishak said the main challenge in attracting the Islamic banks to distribute their products was the different interpretations of syariah-compliant products domestically and in the Middle East.
"These banks look at the Malaysian products and their own interpretation before deciding on how to integrate the products with their respective interpretations," said Zulkifli.
The fund management company is also in the process of developing expertise to manage global sukuk funds from Malaysia.
"Hardly anyone offers it because there is very little expertise worldwide to manage such funds. So, we are building the resources now in terms of selecting fund managers, putting up a system to manage it and collating research on sukuk issuances," said Toh.
He said PFMB will depend on the group's overall network for research materials to structure products and portfolios customised for their clientele.
"Since we already have the global equity expertise, we are now focusing on the global sukuk expertise. Our asset management licence allows us to manage global sukuk funds and we should get this out in the next couple of months," said Toh.
PFMB currently manages offshore syariah funds amounting to RM249 million as at January 31 2008, consisting of fund mandates from Indonesia and Dubai.
"We are working towards managing more mandates coming from overseas, while locally we continue to manufacture innovative syariah products," said Toh, adding that PFMB will focus on launching more products in Indonesia, Malaysia and the Middle East.
Prudential was also recently voted best Islamic fund manager by the readers of Islamic Finance News.
'Islamic finance mart needs more hybrid products'
'Islamic finance mart needs more hybrid products'
By Roziana Hamsawi Published: 2008/07/14
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Japan and Hong Kong are now keen to venture into this market and if Malaysian players could become more innovative, they could easily export their expertise, says Zain Ibrahim & Co
THE Islamic finance market is in need of more hybrid products to meet the increasingly sophisticated needs of corporate clients, said Zain Ibrahim & Co (Zico) chairman Datuk Dr Nik Norzrul Thani.
Local players must grab the opportunity to become more product innovative, taking advantage of the strong Islamic finance framework already provided by the authorities.
"Japan and Hong Kong are now keen (to venture) into this market and if we could become more innovative, we could easily export our expertise," Nik Norzrul told Business Times in an interview.
Nik Norzrul, a former dean at the International Islamic University Malaysia, said the presence of foreign Islamic banks in Malaysia has been positive.
"The competition has brought about more product innovation among the local players, although there is still a lot of room for improvement," he said.
Nik Norzrul advises clients on a wide range of legal matters incorporating Islamic finance, banking, offshore finance, debt restructuring, international, corporate and commercial law.
A director of Al Rajhi Banking and Investment Corporation (Malaysia) Bhd, he has also written several articles on corporate and financial issues, particularly on Islamic banking.
Zico is the country's largest legal firm and is active in Islamic finance locally and regionally. It has presence in Indonesia, Singapore and Thailand.
It is the first law firm in Malaysia to establish a syariah advisory firm called ZI Shariah and will soon open an office in Dubai.
ZI Shariah, which is licensed by the Securities Commission to advise on sukuk, has advised clients from the Middle East who came to Malaysia on syariah framework.
The advisory services include not only for the Islamic banking legal matters, but also on personal Islamic financing and syariah-compliant wealth management.
"We have done this quite successfully with the Middle East clients and we are now contemplating to open an office in the region, maybe in Dubai," Nik Norzrul said.
Realising the growing importance of Islamic finance globally, especially among those from the Middle East who are flushed with cash, ZI Shariah has hired Arab-speaking lawyers as well as Arabic classes are being provided for its lawyers and staff.
Nik Norzrul said apart from language, legal advisers must be well equipped in understanding the syariah field, especially in the area of Islamic financing.
There is still lack of experts in this area, he said, when compared with the huge demand for Islamic financial products.
"In Malaysia, for example, why is that Muslims are still generally hesitant to engage an expert in Islamic financial management? Why is there still this assumption that Muslims cannot have wills?" he asked.
Nik Norzrul said this is an area that posed great potential and syariah lawyers should be well equipped with Islamic financial management skill.
"Muslim lawyers can play the role of family counsellors and advise Muslims to plan their finances properly before their death," he added.
By Roziana Hamsawi Published: 2008/07/14
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Japan and Hong Kong are now keen to venture into this market and if Malaysian players could become more innovative, they could easily export their expertise, says Zain Ibrahim & Co
THE Islamic finance market is in need of more hybrid products to meet the increasingly sophisticated needs of corporate clients, said Zain Ibrahim & Co (Zico) chairman Datuk Dr Nik Norzrul Thani.
Local players must grab the opportunity to become more product innovative, taking advantage of the strong Islamic finance framework already provided by the authorities.
"Japan and Hong Kong are now keen (to venture) into this market and if we could become more innovative, we could easily export our expertise," Nik Norzrul told Business Times in an interview.
Nik Norzrul, a former dean at the International Islamic University Malaysia, said the presence of foreign Islamic banks in Malaysia has been positive.
"The competition has brought about more product innovation among the local players, although there is still a lot of room for improvement," he said.
Nik Norzrul advises clients on a wide range of legal matters incorporating Islamic finance, banking, offshore finance, debt restructuring, international, corporate and commercial law.
A director of Al Rajhi Banking and Investment Corporation (Malaysia) Bhd, he has also written several articles on corporate and financial issues, particularly on Islamic banking.
Zico is the country's largest legal firm and is active in Islamic finance locally and regionally. It has presence in Indonesia, Singapore and Thailand.
It is the first law firm in Malaysia to establish a syariah advisory firm called ZI Shariah and will soon open an office in Dubai.
ZI Shariah, which is licensed by the Securities Commission to advise on sukuk, has advised clients from the Middle East who came to Malaysia on syariah framework.
The advisory services include not only for the Islamic banking legal matters, but also on personal Islamic financing and syariah-compliant wealth management.
"We have done this quite successfully with the Middle East clients and we are now contemplating to open an office in the region, maybe in Dubai," Nik Norzrul said.
Realising the growing importance of Islamic finance globally, especially among those from the Middle East who are flushed with cash, ZI Shariah has hired Arab-speaking lawyers as well as Arabic classes are being provided for its lawyers and staff.
Nik Norzrul said apart from language, legal advisers must be well equipped in understanding the syariah field, especially in the area of Islamic financing.
There is still lack of experts in this area, he said, when compared with the huge demand for Islamic financial products.
"In Malaysia, for example, why is that Muslims are still generally hesitant to engage an expert in Islamic financial management? Why is there still this assumption that Muslims cannot have wills?" he asked.
Nik Norzrul said this is an area that posed great potential and syariah lawyers should be well equipped with Islamic financial management skill.
"Muslim lawyers can play the role of family counsellors and advise Muslims to plan their finances properly before their death," he added.
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