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Wednesday, 9 January 2013

Malaysia: Strong demand seen for Danainfra’s sukuk

PETALING JAYA: Danainfra Nasional Bhd's exchange traded sukuk, the latest asset class that has been just launched, is expected to attract strong demand from investors who want exposure to infrastructure-based bonds.
According to analysts, this is because it is the single asset class in its category that allowed retail investors to diversify their investment portfolio from the usual opportunities available on the market.
Danainfra's maiden issuance, which aims to raise funds for the construction of the mass rapid transit (MRT) project, will have a nominal value of RM300mil.
Danainfra's retail sukuk was created as part of its efforts to broaden its investor base by allowing participation of retail investors to fund the MRT project, its factsheet stated.
The date of issuance and listing on Bursa is targeted for Feb 8, opening offer date was yesterday with its closing date on Jan 18.
The first Danainfra retail sukuk that will have a tenure of 10 years is guaranteed by the Government and is a syariah-compliant investment with CIMB Islamic Bank Bhd as the syariah adviser.
According to Danainfra, yields are about 3.7% although this figure is not yet finalised pending the market appetite for the retail sukuk.
The minimum investment board lot size for exchange traded bonds and sukuk (ETBS) is 10 units per lot size with a principal price of RM100 per unit. Thus each board lot will cost RM1,000 excluding transaction costs, a factsheet by Bursa Malaysia stated.
It added that profit payment of Danainfra's retail sukuk, which will be paid semi-annually, is also tax exempted while the profit rate per annum would be fixed throughout its tenure.
The Government has also approved the utilisation of investors'Employees Provident Fund account 1 to allow direct investments to include ETBS instruments or government and government-guaranteed bonds and sukuk through authorised agents.
Bond Pricing Agency Malaysia chief executive officer Meor Amri Meor Ayob told StarBiz that Danainfra's issuance was a “positive step in the right direction” for the country as it offered a new investment asset class for retail investors.
RAM Holdings group chief economist Dr Yeah Kim Leng also said he believed there was strong appetite for fixed-income instruments such as Danainfra's being the latest.
“They will boost investors' confidence in these secure investments. Infrastructure-related bonds and sukuk funding make up close to 30%-40% of issuances today,” Yeah added.
According to Malaysian Rating Corp Bhd's chief executive officer Razlan Mohamed, there will likely be a “strong demand” for this retail issuance because of the size of the offering which will be easily absorbed by retail investors.

(The Star Online / 09 Jan 2013)

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Tatarstan keen to explore halal industry and Islamic banking with Malaysia

PUTRAJAYA: The Republic of Tatarstan in the Russian Federation is keen to explore potential collaboration in various sectors with Malaysia, especially the halal industry and Islamic banking, Foreign Minister Datuk Seri Anifah Aman said yesterday.

He said Tatarstan, a semi-autonomous region within the Russian Federation and one of Russia’s biggest Muslim regions with about 18 million population, had great potential for the halal industry.

“We have discussed a variety of issues, and I think there’s great potential for Tatarstan and Malaysia to work together in trade and investment, especially in the halal industry, Islamic banking, tourism and higher education.

“Besides that, the republic is keen to work closely with Malaysia in oil and gas, infrastructure, energy and manufacturing of helicopters. They have urged us to look further into this,” he told reporters after receiving a courtesy call from Tatarstan President, Rustam Minnikhanov, at Wisma Putra, here, yesterday.

Minnikhanov leads a delegation of 40 businessmen, and education and government officials for a three-day official visit to Malaysia, starting yesterday.

The visit will play an important role towards strengthening the trajectory of bilateral collaboration set during Minnikhanov’s last visit to Malaysia in 2010.

On higher education, Anifah said Tatarstan invited Malaysian students to study medicine in Kazan, the capital and largest city of the republic.

“They are very advanced in medical studies and the president suggested that we send some of our medical students to Kazan,” he said.

Anifah said Tatarstan also hoped to have direct flights to Kuala Lumpur to boost the tourism sector for both countries.

Foreign investment from Malaysia into Tatarstan increased from US$741,100 to US$950,000 in 2011. The three quarters of 2012 saw US$568,000 investment into Tatarstan from Malaysia.

Last year, Tatarstan attracted US$420 million of foreign investment, of which US$334 million was foreign direct investment.

The republic, with a population of 3.8 million, boasts nearly 1,300 companies with the participation of foreign capital, of which more than 600 are completely owned by foreign investors.

(Berneo Post Online / 09 Jan 2013)

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Dubai Plans Regulatory Council to Push Islamic Finance Industry

Dubai, the second-biggest member of the United Arab Emirates, plans to create an Islamic finance council to regulate Shariah-compliant equity and fixed-income products to boost the industry’s role in the economy.
Dubai, which derives about 11 percent of economic output from financial services, wants to make Islamic finance a “core industry,” Sami Al Qamzi, director general of Dubai’s Department of Economic Development, said at a conference in the emirate today.
“The addition of Islamic industry is a priority to turn Dubai into the capital for the Islamic economy,” Al Qamzi said. The emirate will seek to encourage the development of a market for Islamic products including funds, sukuk and loans, he said.
Dubai became a regional hub for finance when it opened a financial center in 2004 to attract international banks, asset managers and insurers with promises of a zero-tax environment for 50 years. Global Islamic financial assets may double to as much as $3 trillion by 2015, Standard & Poor’s said in September, prompting governments, companies and banks in the Gulf Cooperation Council to take steps to boost their share in the business.
Shariah-compliant bond sales in the six-nation GCC tripled to $21 billion last year, according to data compiled by Bloomberg, as yields dropped to all-time lows.

(Bloomberg / 09 Jan 2013)

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