Amana Takaful records 32 % growth for 1H of 2012

| Wednesday, September 19, 2012

Amana Takaful, recorded an impressive growth of 32% for the first half of 2012, well above the industry. The first half figures released by the company reflects a total Gross Written Premium(GWP) of Rs 770.8 million up from Rs.584.7 million in the comparative period of 2011. Individually, the first half General and Life businesses’ GWP of Rs. 603.3 million and 167.5 million respectively, grew by 32 % each in the same comparison.

This compares with the overall industry growth of 11 % in which General and Life segments moved up by 17 % and 3 % respectively as per industry sources. This performance propelled ATPLC’soverall market position. The General business performance was well supported by the Motor portfolio growth as well as the Non-Motor classes which moved up by 29 %, in which Medical was at the forefront. With the launch of “PROSPER” an Investment-linked Life product in the second half of 2011, ATPLC realized a significant contribution in the overall growth.

At an underwriting level, though the result was positive in comparison with the corresponding period last year, the significant increase in the Motor Claims stifled the planned performance goal.

Notwithstanding the slide in the equity market conditions, the judicious management of our diversified investment portfolio yielded an upside in investment returns of 263 % over the same period last year.

Despite the afore mentioned, ATPLC ended the half year with a loss of Rs. 34 million primarily driven by an over-run in Motor claims, as stated earlier. However, at Group level, a consolidated profit of Rs 43.6 million is reported to which the Maldives Takaful operation contributed substantially among the other subsidiaries.

Amana Takaful Maldives (ATM), now in its first year of operation as a PLC, recorded a GWP of MRF 29.7 million Rs 252.3 million) posting a growth of 31 % over 2011.

Bloomberg Launches New Corporate Sukuk Index for Islamic Finance

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Bloomberg today announced further commitment to the Islamic finance market with the launch of a Malaysian Ringgit (MYR) corporate sukuk index, developed with the Association of Islamic Banking Institutions Malaysia (AIBIM) and Bursa Malaysia. The Bloomberg AIBIM Bursa Malaysia Corporate Sukuk Index will serve as a benchmark for investors of ringgit- denominated Islamic bonds in Malaysia, the world’s biggest sukuk market.
Global demand for corporate and sovereign sukuk has grown over the last decade and in Malaysia, as low borrowing costs continue to drive issuance. Malaysia is having a record year for sales of corporate sukuk, with potentially about 20 billion ringgit of Shariah-compliant debt in the pipeline, according to data compiled by Bloomberg.
The new corporate sukuk index will track and measure the performance of the most liquid and credit-worthy Islamic corporate bonds in Malaysia. Bloomberg will calculate the Index daily, with rates and prices contributed by member banks of AIBIM.
“Bloomberg has been investing in Islamic finance globally and this announcement reaffirms our commitment to Malaysia’s development as a global Islamic financial centre,” said Kamel Hajri, Bloomberg’s Business Manager for Islamic Finance. “This collaboration means we now have a complete portfolio of Islamic finance indices and tools for Malaysia. We look forward to expanding our joint efforts with key industry players to further enhance market transparency and liquidity, with the goal of fulfilling investor demand for more robust Shariah-compliant solutions.”
Dato’ Mohd Redza Shah Abdul Wahid, President of AIBIM, said, “With the diversification of the Islamic finance market, there is a growing need for access to accurate, timely and comprehensive data. Strategic collaboration to develop localized financial products will help stimulate the long-term growth, competitiveness and sustainability of Islamic finance services.”
“As a top global sukuk underwriter, we see domestic and foreign issuers actively tapping the Malaysian sukuk market,” said Dato’ Mohamad Zabidi Ahmad, CIMB Malaysia’s Head of Islamic Treasury. “By providing accurate pricing and benchmarking, this index will improve portfolio management and contribute to a more robust bond market.”
Deputy Governor Muhammad Ibrahim said, “Malaysia continues to develop and strengthen Islamic finance with increasingly sophisticated products and supportive infrastructure. The launch of the Bloomberg AIBIM Bursa Malaysia Corporate Sukuk Index is timely as it will contribute to better price transparency that enables investors to make informed investment decisions.”
This is the third sukuk index Bloomberg, in collaboration with Bank Negara, AIBIM and Bursa Malaysia, has developed for the Malaysian market. In 2011, Bloomberg launched the AIBIM Bursa Malaysia Sovereign Index (BMSSITR) and the Malaysia Sukuk Ex-MYR Index (BMSSUTR), as part of its Islamic Finance Platform (ISLM), a broad set of data, analytics and news dedicated to Shariah- compliant products and services.
This latest index was announced at the third Global Islamic Finance Forum (GIFF) in Kuala Lumpur held from 18-20 September, where global industry practitioners, regulators, Shariah scholars and business communities discuss prospects for the Islamic finance industry.
For more information on Bloomberg’s Islamic Finance Platform visit www.bloomberg.com/professional or go to ISLM on the Bloomberg Professional service. Customers and prospects can get more details from Bloomberg’s Head of ASEAN Sales, Nitin Jaiswal at njaiswal@bloomberg.net or             +65-6212-1520      .

Need to enhance and harmonise disclosure requirements in the Islamic capital market

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The growing recognition of the increasing significance of the Islamic capital market, especially in view of rising cross-border transactions, has triggered the need for stronger oversight, greater transparency and more robust disclosure requirements, global standard-setters and senior regulators acknowledged today.


The Islamic Financial Services Board (IFSB) and the International Organisation of Securities Commissions (IOSCO), two global standard-setters in their respective fields, collaborated with the Securities Commission Malaysia (SC) to organise a high-level roundtable in Kuala Lumpur, themed “Disclosure Requirements for Islamic Capital Market Products”.
The roundtable represents a significant step towards the development of international regulatory standards and best practices relating to disclosure requirements for Islamic capital market products. 
“As the Islamic capital market expands and becomes more global, it is increasingly important that issues surrounding investor protection and market integrity are addressed from a cross-jurisdictional perspective.  It is therefore critical for regulators and standard-setters such as the IFSB and IOSCO to further examine disclosure regimes for Islamic capital market products, with a view to allowing more informed investment decision-making and to promote the further growth of the Islamic capital market,” said Datuk Ranjit Ajit Singh, Chairman of the SC, who is also an IOSCO Board member and the Vice-Chair of the IOSCO Emerging Markets Committee.
Jaseem Ahmed, Secretary General of IFSB, emphasised that promoting cross-border financing and investment through Islamic finance is critical to attaining the depth and scale in Islamic capital markets needed to be competitive. “This will require the adoption of robust regulatory and disclosure practices that give confidence to investors and consumers alike.  IFSB hopes that this collaboration with IOSCO will facilitate a process leading to a set of practices that could be harmonised or mutually agreed upon,” he said.
David Wright, Secretary General of IOSCO said, “The recent financial crises highlighted the importance of sound disclosure regimes in mitigating systemic risk and building confidence in the financial markets. Given the tremendous growth of the Islamic Finance industry - an increasingly important segment of the global financial markets – it is essential to achieve greater harmonisation in disclosure requirements across jurisdictions where Islamic capital market products are offered.” 
Participants of the closed-door roundtable also discussed the importance of effective disclosure requirements in facilitating greater cross–border Islamic capital market activities, analysed the risks and challenges arising from inadequate disclosures in the area of Sukuk and Islamic Collective Investment Schemes and identified potential approaches which can be adopted by standard-setters, regulators and market participants alike.
The roundtable, held at the Securities Commission today, was attended by senior regulators, international institutions, academia and leading market practitioners from 16 jurisdictions.


AMANIE OPENS OFFICE IN OMAN, PLANS SHARIA MEET

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Meethaq, as part of its long standing commitment to Islamic finance, will be welcoming global leaders to Muscat to discuss the way forward for the industry's further development, both within Oman and the wider region.
The two-day gathering will bring senior industry figures, global investors, takaful operators, and bankers, as well as top Sharia scholars. The topics will focus on the newly created opportunities in Oman and other countries in the wider region new to Islamic finance.
Specifically, the forum will discuss the current state of the sukuk market, new opportunities for takaful providers, winning strategies for distributing funds; and the issues faced by new Islamic banks in Oman, such as asset-liability management, treasury and interbank money markets.
Giving the keynote address will be Dr Mahathir Mohamad, former Prime Minister of Malaysia. Throughout his tenure as Prime Minister, between 1981 and 2003, Mahathir was a strong supporter of the global development of the Islamic finance Industry.
Dr Baker said, "Hosting informative events is an ideal way to greet a new market. With so much education required in our field, we felt that bringing many of our industry friends together and hosting a conference would help us to meet many new friends and help get people talking about new possibilities and collaborations."

Islamic Banking feasible in Ghana - Zenith MD

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The Managing Director of Zenith Bank Ghana, Mr. Daniel Asiedu, has revealed Islamic banking (Interest-Free banking) may be introduced to the Ghanaian banking public in future.

There have been calls by some stakeholders for the bank of Ghana to consider introducing Islamic banking just like in Nigeria. 

Under Islamic banking, a borrower only needs to pay back the amount owed to the bank, and the borrower can also choose to pay the lender a small amount of money to serve as a gratuity.


Speaking to Citi Business News, Mr. Asiedu said, “If it is a product that has done well in other economies, why not, maybe it could do well.”

According to the Zenith Bank MD, they will not discriminate and are here to serve the banking public hence any product that they see as useful will be deployed in Ghana.

He, however, said if it becomes possible Zenith Bank will introduce the interest-free banking in Ghana.

Meanwhile, the bank in celebrating seven years in the Ghanaian banking industry and as a socially responsible financial institution organised a health walk over the weekend for staff and clients. The walk saw both staff and customers of the bank walk within the East Legon environs.

The MD said “our focus remains to make you our customers, the reason for our existence. We will continue to keep abreast with business trends, introduce unique products, branch out to increase accessibility and price our services competitively to delight our customers.” 

Islamic banking regulation expected at any time: CBO

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The much-awaited regulation for Islamic banks and window operations of conventional banks will be announced through a Royal Decree at any time.

"It can come at any time. The Majlis A'Shura and Cabinet have already cleared the new regulation and now we are waiting for a Royal Decree, which can come at any time,- Central Bank of Oman Executive President Hamoud Sangour Al Zadjali, told Times of Oman over phone. It appears that the Royal Decree is for amending certain clauses to incorporate Islamic banking business.

In fact, Bank Nizwa -” the first Islamic bank in the country -” and several other conventional banks are ready for starting Islamic banking business. Bank Nizwa, which has a paid-up capital of RO150 million, has been ready with its key officials for starting its operations, while alizz islamic bank is raising RO40 million from investors for forming the bank.

Among conventional banks, bank muscat, ahlibank, Bank Sohar and National Bank of Oman are expected to be the first ones to enter the market with their Islamic banking products. 

ahli bank is fully geared up start window operations through four branches. "We are 100 per cent ready for starting window operations. We have our Sharia board, accounting and auditing standards and risk management are in place and have already recruited staff. Also, we have established core banking system and devised Islamic banking products,- Abdul Aziz Al Balushi, CEO of ahlibank, told Times of Oman. 

A five-member Sharia board, exclusive branches for window operation, clear cut segregation of conventional and Islamic banking with separate teams of people and accounts and a 12 per cent capital adequacy ratio were the main highlights of the Islamic Banking Draft Framework (IBRF), when it was prepared by international audit firm Ernst and Young. Ernst & Young advised the Central Bank of Oman for framing the set of new regulation.

However, top-level officials in the banking sector are not clear whether the banking regulator has made changes in the draft report, after receiving their feedbacks. "We are waiting for the regulation to come for allocating funds for Islamic banking window operation,- added Al Balushi. The bank would like to see the capital requirement for different types of Islamic banking products for taking a final decision on allocating capital. ahlibank recently mobilised RO25 million through a rights issue, which took the paid up capital to RO120 million. 

"We are prepared for starting window operations,- added Dr. Mohammed Abdulazz Kalmoor, chief executive officer of Bank Sohar. The bank is looking at opening five exclusive branches -” two in capital area and three in interior regions -” for offering Islamic banking services. Like other commercial banks, Bank Sohar has done enormous amount of work in terms of ground work for launching Islamic banking services. 

According to the draft Islamic banking framework, of the Sharia board, three should be experienced Islamic scholars and two should be from relevant field, either a professional in Islamic law or Islamic accounting. 

CBO's draft regulation also stipulated on separate branches for Islamic banking window operation of conventional banks. The draft regulation also insisted on a 12 per cent capital adequacy, with a minimum paid up capital of RO10 million for starting window operations.

Another major suggestion for window operation is that funds can be pumped into Islamic line of business by a conventional parent bank, but Islamic banking operation can not transfer money for using it in conventional banking.

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