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Saturday, 14 May 2016

Malaysia: Sukuk market holds potential,but devoid of retail players

KUALA LUMPUR: The sukuk market has a lot of potential as an asset class, but is currently dominated by institutional investors with little opportunities for retail players, a forum was told yesterday.
OCBC’s consumer financial services chief Lim Wyson said sukuk provides predictability of yields, which is especially looked for by investors in a volatile market.
“It is not so volatile compared to equities,” he said at a talk on Islamic wealth management at the Global Islamic Finance Forum 5.0.
Lim stressed, however, that the “depth and width” of the sukuk market need to be developed.
“If you are able to widen and deepen the sukuk issuance, you can tap into the private wealth management part of the business,” he said.
Speaking to reporters later, Lim said most of the time, institutional investors are the first to buy during a sukuk issuance. 
“Then there is left very little for the retail side. So one of the areas [to look into] is bigger development in terms of the number of issuance, liquidity so that retail investors have access to it,” he added.
Lim said the creations of more unit trusts with sukuk-investor type of funds will provide access for investors to participate in sukuk through a unit trust format.
“This is relating to investment mandates. Most of the syariah invested funds here are very concentrated in Malaysia or have a big allocation in Malaysia.
“What we are trying to find is more globally invested type of unit trust that is syariah-tied, that we will be able to give to our clients.
“That is the opportunity that we see, if we have more globally diversified mandates that are not so biased in terms of the heavyweight allocation to Malaysia. That is a demand seen in the market,” he added.
According to RAM Rating Services Bhd, global sukuk issuance totalled US$66.4 billion last year, with Malaysia being the world’s largest sukuk market.
In March 2015, Malaysia’s sukuk issuances accounted for 58% of the global US$308 billion outstanding sukuk.
Another speaker, Employees Provident Fund chief executive officer Datuk Shahril Ridza Ridzuan, said there has been limited growth in the global issuance of sukuk to certain issuing markets and issuers.

“Hopefully, if we can move away from this preoccupation with syariah financing purely on faith-based systems towards sustainability, then I think that’s the right way forward to improve growth of this market.

(The Edge Markets / 13 May 2016)
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Zakat Foundation’s Super 17 shine at civils

Aligarh: It was a day of fireworks at New Delhi's Mukherjee Nagar-based Zakat Foundation - an organization devoted to increasing the number of civil servants in India, whose 17 candidates made to the final list of civil services examination on Tuesday. The organization, which selects candidates for coaching after an exam conducted at centres situated in areas of concentration of Muslim population, had coached a total of 35 candidates. Significantly, 16 of its students had also cleared the prestigious exam even last year.

The candidates who cleared the exam this year include Farha Husain from Rajasthan, Mohd Arshad from Jharkhand, Ansar Ahmad Shaikh from Maharashtra, Minhajuddin Nizami, Ashar Ahmad, Arish Bilal from Uttar Pradesh, Anna Sosa Thomas, Benson Samuel, Dr Ibson Shah and Ashif Anakarth from Kerala, Asim Anwer from Karnataka, Syed Junaid Adil, Dr Bashit Qayoom, Dr Bilalwal Shafeeq Chowdhury, Shakil Ahmad Ghani, and Deeba Farhat from Jammu and Kashmir and Hussain Mehedi Rahman from West Bengal.

The organistaion's founder, Zafar Mahmood, who was in Aligarh to encourage and inspire AMU students to prepare for civil services exam, told TOI, "Political representation of Muslims is very low because constituencies of Muslim majority areas are mostly reserved for SC/ST candidates. The Sachar Committee had asked for referring this anomaly to the Delimitation Commission. Similarly, sufficient number of Muslims are not appearing for civil services exam after a well-directed training. . The effort needs to be made by sincere community leaders and well-wishers."

Explaining the way the foundation picks up talent and nurtures them for the country's top exam, Mahmood, himself a civil servant who took voluntary retirement in 2009, said, "The candidates are taken only after they clear the foundation's in-house exam. The exams are conducted in Kerala, Jammu and Kashmir and in Kolkata keeping the concentration of Muslim population in mind and also the fact that the potential of people in these regions is very good. Then a test is held in Delhi for the Muslim aspirants from the rest of India. After the results are out, good performers are taken in and are provided with residential as well as coaching facilities in New Delhi's Mukherjee Nagar. A monthly report card of each candidate is maintained to track his or her performance."

Since Independence, there have been just four Muslim toppers of civil services exam and one of them, Shah Faesal from Kashmir who topped the exam in 2009, was coached by this foundation.

According to Mahmood, a lack of information and confidence in the system has led to disinterest of Indian Muslims in the civil services exam. "Ever since I joined the services in 1977, I made it a point to visit AMU, Jamia Milia Islamia and other minority institutes to encourage Muslim students for taking the exam. I met students and encouraged them to become part of the policymaking system and governance," he said.

(The Times Of India City / 10 May 2016)
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Indonesia: BI urges Islamic finance industry to enhance human capital

Bank Indonesia ( BI ) has urged Islamic financial institutions to enhance their human capital in order to improve competitiveness and sustain the industry’s rapid growth.
"If we want to see the Islamic financial sector on par with its conventional counterpart, it is relevant to improve the human capital," BI deputy governor Hendar told a seminar on human capital development held at BI’s offices in Jakarta on Friday.
Hendar added that Islamic financial institutions had achieved significant growth, surpassing the growth of conventional financial institutions even during the global economic crisis.
Despite this achievement, the industry was still facing a low quality of human capital, resulting in relatively low operational efficiency and poor product knowledge, he said.
"We should pay more attention to the low quality of human resources. This unfortunate phenomenon has affected many countries, including Indonesia," he said.
To enhance human capital, industry players needed to address crucial factors. Universities needed to provide teaching materials that combined Islamic and regular education with technology-based development and needed to build strong cooperation with global institutions.
Meanwhile, Ali Ghufron Mukti, director general for science, technology and higher education at the Research and Technology and Higher Education Ministry, added that to achieve global competitiveness, industry players needed to improve technological readiness, innovation and higher education.
"In the era of ASEAN Economic Community, human resources, undoubtedly, play an important role to enhance the competitiveness of the country. Hence, the ministry encourages individuals and organizations to conceptualize and make strategies to enhance human capital," he said, adding that vocational education was necessary beside academic education.

He said priority sectors to focus on were energy and renewable energy, health care, transportation, defense and maritime industries.

(The Jakarta Post / 13 May 2016)
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