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Thursday, 24 October 2013

Malaysia: Construction, Islamic Finance May Be Biggest Beneficiaries On Local Bourse

KUALA LUMPUR, Oct 23 (Bernama) -- Construction and Islamic finance-related stocks may be among the biggest beneficiaries on the local bourse moving forward as the government unveils its plan in Budget 2014 on Friday.

Affin Investment Bank Vice-President and Head of Retail Research Dr Nazri Khan said construction counters, especially those with low content and high multiplier project owner, would likely benefit.

He said higher multiplier projects such as the Mass Rapid Transit (MRT) circle Line 2 and Line 3 and Southern Double Tracking as well as the proposed Kuching-Kota Kinabalu Pan Borneo Highway may kick-start.

However, big ticket high import items like Kuala Lumpur-Singapore High Speed Rail and third interchange linking Johor and Singapore could face a delay, he told Bernama.

As the government focuses on Islamic finance and takaful industry, industry players may get added incentives next year to encourage bigger market share and provide more protection among Malaysians, Nazri Khan said.

"Stocks going big into Takaful such as Takaful Malaysia, Allianz and MAA may benefit," he said.

The government may also launch a National Healthcare Project in the upcoming Budget that would provide every Malaysian with access to quality healthcare, he said.

"Healthcare stocks such as IHH Healthcare, KPJ Healthcare and TMC Life Sciences should benefit. Further, using Budget 2013 trend, Budget 2014 should again promote local tourism sector which means healthcare sector via medical tourism again will benefit," he added.

Generally, Budget 2014 should spur local market sentiments by introducing tough measures to boost trade competitiveness, improve fiscal credibility, address the recent downgrade by sovereign credit rating and encourage stronger private sector participation to boost economic growth.

Also, the upcoming budget would likely focus on the implementation of subsidy rationalisation programme, the implementation of goods and services tax (GST) and extension of BR1M for the low-income earners.

He also said banks and properties could be mildly affected as the government may continue with the properties-cool-down and bad-debt-measures involving houses, properties, automotive and personal loans.

Softer retail or corporate loans are therefore expected due to higher stamp duty, foreign cap, tougher RPGT (real properties gains tax) and higher loan-to-value (LTV) ratio for property purchases and shorter personal financing tenure, he added.

Nazri said assuming big positive impacts on key beneficiaries and minimal negative impacts on other sectors (likely losers banking and properties stocks), FTSE Bursa Malaysia (FBM KLCI) should trend towards a range of between 1,800 and 1,820 points before the budget presentation.

(National News Agency Of Malaysia / 23 Oct 2013)

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Al Rajhi Bank, IRTI Tie Up To Tap Potential Sukuk Market In IDB Member Countries

KUALA LUMPUR, Oct 23 (Bernama) -- Al Rajhi Bank Malaysia and Islamic Research and Training Institute (IRTI), a member of Jeddah-based Islamic Development Bank (IDB), see great potential in sukuk issuance and capital market activities in IDB member countries.

Al Rajhi Bank Malaysia Chief Executive Officer Datuk Azrulnizam Abd Aziz said bonds and sukuk had become an important long-term financing instrument in funding infrastructure development as tighter liquidity conditions and regulations under Basel 3 were constraining traditional long-term lending by banks.

"Major investment in infrastructure is still needed in developing emerging economies, to facilitate growth and reduce poverty.

"In Asia alone, it is estimated that US$8 trillion of investments are needed in transport, communication and infrastructure up to 2020," he said at the signing of a memorandum of understanding (MoU) between Al Rajhi Bank Malaysia and IRTI here on Wednesday.

Malaysia remained the forerunner in global sukuk issuance, most of which are for funding infrastructure development, he added.

The strategic collaboration is to provide support for sukuk issuance and Islamic capital market activities for IDB member countries and their corporations.

Under the MoU, IRTI has been tasked to identify the member countries that are interested to develop sukuk and Islamic capital market and provide them with advisory services while Al Rajhi Bank will lend technical support to develop and structure the instruments.

The MoU, Azrulnizam said, would represent a framework of collaboration and coorporation between the two institutions for sukuk solution and platform of exchange to discuss Shariah standard and issues.

Meanwhile, Prof Datuk Dr Mohamed Azmi Omar, Director General of IRTI, said their focus was on the government sector namely the regulators.

"Being a development bank, our clients are the government and not private sector...We provide advice to the government in the implementation of Islamic finance," he added.

Mohamed Azmi said African countries were now seen as the new emerging markets and new growth areas for Islamic financing and sukuk, looking at the birth of significant interests.

He said the growth of sukuk globally would continue to increase as we saw continuous demand for sukuk moving to this part of the world.

"These countries needed a lot of infrastructure development and sukuk is very much suitable to finance the development as it is project-based," he added.

(National News Agency Of Malaysia / 23 Oct 2013)

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London: David Cameron wants UK to become centre of Islamic finance

LONDON: Prime Minister David Cameron says he wants to turn Britain into the world centre of Islamic finance and is proud that UK is helping Pakistan with its taxpayers’ money to send hundreds of thousands of children to school.

Speaking to guests at his annual Eidul-Azha reception in Downing Street, the prime minister said that Britain was helping Islamic countries, including Pakistan and Afghanistan, to stand on their feet and had increased the development aid budget to show solidarity with these struggling countries. Over a hundred leading members of the British Pakistani and Muslim community were present at the reception.

They were joined by senior government ministers, including Baroness Sayeeda Warsi, Imams, community and business leaders, charities and public servants from across the diverse range of Muslim communities in the UK.

PM Cameron announced plans to make government finance schemes available to Islamic students and entrepreneurs. He said student loans, start-up loans and the enterprise allowance would be made compatible with the religion’s strict rules on finance.

The prime minister said he wanted the UK to be a world centre for Islamic finance and it was in this spirit that a historic conference on Islamic global finance will be held in London in few days. Prime Minister Nawaz Sharif, besides several other government dignitaries from Islamic countries, will speak at the conference.

Cameron said: “I want Britain to be one of the world’s centres of Islamic finance - from the highest and mightiest financial institutions all the way to start-ups. The prime minister said: “I’m proud of the that fact that even in difficult economic times this country is one of the few countries in the world that has kept its promise on aid and development - meeting that 0.7% target of our gross national income. A lot of that money goes to some of the most challenged Islamic countries in the world. It is something that we can all be proud that every two seconds a child is vaccinated somewhere in the world because of aid that British tax payers have provided.”

“We’ve got tens of thousands of young people starting their own businesses and tonight I can announce that we will make sure that there is a type of start-up loan that is totally consistent with all the principles of Islamic finance. We must do that for start-up loans, we must do that for student loans and we must do it for the enterprise allowance. That’s what a welcoming, tolerant, multi-racial country does.”

Praising the Muslim community for their contribution to Britain, the prime minister said: “Tonight is about celebrating the contribution that British Muslims make to our country. It is a huge contribution. But tonight is also an opportunity to talk about the issues of integration, of how we help Muslims around the world and the importance of faith in our country and in our communities and the Muslim faith is so strong in that.”

Prime Minister Cameron spoke about the strength of the faith, especially the Abrahamic faiths who have “so much in common”. He shared his experience of helping to prepare Iftari this year on Eidul Fiter in Manchester. The PM said lightly that he was scared when he was asked to cut onions to prepare pakoras and samosas. That could have become the “worst television moment” because there was a danger of “cutting my finger” or “start crying”. But, he said, opening up to all communities to see how Muslim celebrate Ramazan was a brilliant idea.

Dr Waqar Azmi OBE introduced the prime minister to the guests and called him a “friend of the Muslim community” who led from the front after the Woolwich killing and said that terrorists have nothing to do with Islam.

Addressing PM Cameron, Dr Azmi said: “You showed true leadership when you said on the steps of Downing Street that the Woolwich attack was a ‘betrayal of Islam’. This resonated with everyone in the Muslim community. We value your support for the British Muslim community.

Your statement on the Mosque being built in your constituency in Chipping Norton is a good example. It is moments like this that we know that the British Muslim community has a friend in you. Thank you.”Prior to PM Cameron’s speech, a dua was offered and verses from the Holy Book of Quran were read.

(The International News / 23 Oct 2013)

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