Maldives: More than 50,800 eligible for Zakat

More than 50,800 people across the country are eligible for Zakat (alms for the poor) this year, the Islamic ministry has revealed.

Zakat is an obligatory alms tax collected from the accumulated wealth of all able Muslims.

Deputy minister for Islamic affairs Dr Aishath Muneeza told the press on Monday that more than 13,000 people in Malé and 37,800 people in other islands are registered as poor.

Muneeza said the ministry plans to distribute MVR20 million (US$1.2 million) before Ramadan at a rate of MVR400 (US$26) per person, noting that the sum was the highest so far.

The ministry collected a record MVR52 million (US$3.3 million) as property Zakat last year. The registered number of poor in 2014 was more than 53,000.

Muneeza noted that Zakat payments can also be made through Dhiraagu and Ooreedoo.

Newly appointed Islamic minister Dr Ahmed Ziyad said at the press conference that renovation work on several mosques across the country will begin next week with a target of completion before Ramadan.

(Minivan News / 26 May 2015)

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Ivory Coast to Sell $1.1 Billion of Domestic Bonds, Sukuk

Ivory Coast plans to sell $1.1 billion of debt in regional markets before the end of the year, including Islamic bonds denominated in the local currency.

The government will seek to sell Sukuk bonds that have maturities of more than five years, Budget Minister Abdourahmane Cisse said in an interview in Abidjan, Ivory Coast’s commercial capital, on Monday. Ivory Coast and seven other countries in West Africa use the CFA franc, which is tied to the euro.

“We want to diversify the types of investments” the nation offers, he said. “We basically want to give Ivory Coast exposure to a lot of different investors.”

The world’s largest cocoa producer is targeting growth of 10 percent this year and wants to lure more investors after a political crisis in 2010 led to months of violence and a default on dollar bonds. Ivory Coast is seeking to capitalize on demand for its debt after a sale of Eurobonds this year was four times oversubscribed. Yields on the $1 billion of securities due March 2028 fell 1 basis point to 6.39 percent as of 11:47 a.m. in London on Tuesday.

Former President Laurent Gbagbo is awaiting trial at the International Criminal Court in The Hague on charges of crimes against humanity relating to the death of about 3,000 people after he refused to concede an election loss in 2010 to Alassane Ouattara, who is now president.

Revenue collection rose 14 percent in the first four months of the year from the same period a year earlier, improving chances the government will meet its growth target, Cisse said. The government is on track to sell about 41.2 billion francs ($69 million) of stakes in companies it owns, he said.

(Bloomberg Business / 26 May 2015)

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Aceh to provide roadmap for Indonesia's Islamic banking ambition

JAKARTA: Indonesia’s bid to rival Malaysia as a Shariah finance hub just took on greater impetus with a plan by Aceh province to convert its development bank to one that complies with Islamic law.

PT Bank Aceh will become the nation’s first to transform from a non-Shariah-compliant entity, setting a precedent for the national government that is also deliberating such a move for a state lender.

Shareholders will vote this week on converting the bank’s 16.4 trillion rupiah ($1.2 billion) of assets, Zulfan Nukman, head of the province’s central bank office, said in a May 21 phone interview from the city of Banda Aceh.

Indonesia’s Financial Services Authority plans to announce this month a roadmap to develop the Shariah-compliant finance industry, as total assets of 272 trillion rupiah pales against Malaysia’s 626 billion ringgit ($173 billion).

The country is seeking toboostits regional profile with a bid to host the infrastructure arm of the Islamic development Bank, whose largest shareholders are Saudi Arabia, Libya, Iran and Nigeria.

“Industry players will be watching closely to see if the process goes smoothly and if the bank becomesmorecommercially viable,” said Achmad Kusna Permana, the Jakarta-based secretary-general at the Indonesia Islamic Banking Association.

“It would support the option to convert a state lender, which would add an instant few billions to Islamic banking assets and create an institution that can compete toe-to-toe with conventional banks.”

Aceh Trailblazing

Bank Aceh is majority-owned by the provincial government and its plan to convert to an Islamic lender has been approved by Governor Zaini Abdullah, Zulfan said.

Aceh, located at the northern tip of Sumatra, was granted more autonomy in 1999 to help stem an insurgency arising from unequal distribution of wealth from its natural resources.

The 30-year conflict ended in 2005 as separatist group the Free Aceh Movement disarmed following a peace pact.

The province has the highest proportion of Muslims at 98 percent and is the only one of 34 administrative regions that has implemented Shariah law, or Qanun, which permits floggings and fines for offenses ranging from stealing, to adultery and alcohol consumption.

Aceh has seen growth in Islamic banking assets outpace those of the conventional market, with a 17.6 percent increase to 5.5 trillion rupiah in 2014, compared with a 9.8 percent rise to 36.7 trillion rupiah, central bank data show.

That’s in contrast to the nationwide trend last year in a country with theworld’s biggest Muslim population.

“A Shariah bank is fitting for Aceh as that’s where the demand is,” said Bank Indonesia’s Zulfan.

“This will add to Islamic banking assets and Bank Aceh will be the trailblazer for other lenders considering to convert to Shariah.”

Size Differential

In an effort to boost the ability of lenders operating under religious principles to win morebusiness, the government began discussing a plan to form an Islamic megabank in 2013.

Options include creating such an institution from scratch, combining the Shariah units of government-held banks or fully converting a non-Islamic state lender.

Similar industry-wide initiatives have so far failed to produce results in a market that Ernst & Young LLP predicts will reach $3.4 trillion in assets by 2018 from $1.7 trillion in 2013.

Malaysia’s CIMB Group Holdings Bhd., RHB Capital Bhd. and Malaysia Building Society put such a plan on hold this year.

The relatively small size of Indonesia’s Shariah-compliant lenders makes it a challenge to compete with bigger conventional rivals, said Permana at the banking association, who is also the Islamic director at PT Bank Permata.

Increasing Confidence

PT Bank Syariah Mandiri, the nation’s largest Islamic bank, had 67 trillion rupiah of assets at the end of last year, compared with second-placed PT Bank Muamalat Indonesia’s 62 trillion rupiah, according to their websites.

That’s a fraction of the 868 trillion rupiah of PT Bank Mandiri and 806 trillion rupiah of PT Bank Rakyat Indonesia.

The Bank Aceh plan is “a good indication of the increasing confidence and commitment of the authorities on the viability and sustainability of Islamic finance,” said Alhami Abdan, head of international finance and capital markets at OCBC Al-Amin Bank Bhd. in Kuala Lumpur.

A Shariah megabank would enhance “the Indonesian Islamic banking industry’s capacity and capability in deepening its coverage of the wholesale banking sector,” he said.

(Astro Awani  / 26 May 2015)

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Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Malaysia, Japan to enhance cooperation in Islamic finance

TOKYO: Malaysia and Japan will enhance their cooperation in areas such as Islamicfinance. Malaysian Prime Minister Najib Razak, who wrapped up his three-day visit to Japan on Tuesday (May 26), is supporting Japan’s foray into the Islamic market.

Many Japanese businesses are eager to learn and see how they can gain a piece of the pie in the growing market.

Mr Najib on Tuesday gave a keynote speech at the round table meeting of the World Islamic Economic Forum (WIEF) Foundation and Alliance Forum Foundation (AFF) in Tokyo - a forum to help link Japan and the Muslim world.

During his visit to Japan, he reached an agreement with his counterpart Shinzo Abe to enhance cooperation in areas such as the halal food industry and Islamic finance.

“We discussed the support from the Japanese government, and its authorities to encourage Japanese enterprises, financial institutions, and investors to engage in Islamic finance-related activities with Malaysia. We in turn will offer technical assistance to Japan in this field,” Mr Najib said.

Japan is still new to businesses catering to Muslims. Restaurants could well be the most advanced in this area, as more outlets in Japan try to offer halal cuisine to the growing number of Muslim tourists, particularly from Malaysia and Indonesia.

Several Japanese banks have also introduced Islamic finance, but the understanding of business opportunities catering to Muslims is still limited.

Katsuya Hisamichi, corporate officer at Rohto Pharmaceutical's R&D Department, said: “Actually, the Muslim world is quite a new field for us. We haven't had any experience with Muslim countries."

Some companies in the financial sector have had more experience.

Nobuaki Kurumatani, deputy president and board member at Sumitomo Mitsui Banking Corporation, said: “Our Islamic finance activities started in 2008 from SMBC Europe that covered Middle-East countries. We are now focusing on Asia. I think the two big markets still are growing, and the most promising next step is focusing on the African market.”

The Islamic economy is expected to grow at double digits for the next few years. Global Islamic finance is estimated at US$2 trillion, while the halal market is worth around US$2.3 trillion.

The medical industry is hoping to tap on the Muslim market too. “Shortage of donor in any country has caused problems in heart transplantation. Also it's very expensive. Almost all countries desire to start stem cell therapy,” said Yoshiki Sawa, Dean at the Osaka University Graduate School of Medicine.

With better cooperation, Malaysia hopes to help Japanese companies, academics, and physicians gain the skills for them to participate actively in the Islamic market. 

(Channel News Asia / 26 May 2015)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Consultant-Speaker-Motivator: www.ahmad-sanusi-husain.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com