Banking and Finance

Gold price (27th September, 2013)

noreply@blogger.com (Unknown) — Sun, 29 Sep 2013 09:03:00 +0000

Gold Price Malaysia (Malaysian Ringgits)

Conversion : 1 troy ounce = 31.1034768 grams

Moody's cuts short-term ratings of 8 Malaysian banks

noreply@blogger.com (Unknown) — Thu, 31 Jan 2013 03:42:00 +0000

Moody's Investors Service has affirmed the long-term deposit and issuer ratings of the eight banks rated A3 in Malaysia, while at the same time downgrading to Prime-2 (P-2) from Prime-1 (P-1) their corresponding short-term ratings.

The eight banks are CIMB Bank Bhd, CIMB Investment Bank, Hong Leong Bank Bhd, HSBC Bank Malaysia Bhd, Malayan Banking Bhd, Public Bank Bhd, RHB Bank Bhd and Standard Chartered Bank Malaysia Bhd.

All of their other ratings have also been affirmed.

Below is the statement issued by Moody's on Thursday:

Today's affirmation of the deposit and issuer ratings reflects Moody's view that these banks continue to feature the credit characteristics of firms rated A3, whereas the downgrade of their short-term ratings in turn reflects Moody's observations of the transition risks of short-term ratings that A3-rated banks represent over time.

RATINGS RATIONALE

Key determinant for assigning a short-term rating is an issuer's long-term risk of default.

Moody's believes that, other things being broadly equal, lower long-term ratings imply not only increased default risk for long-term obligations but also increased default risk for short-term obligations.

This view is based on Moody's assessment of current credit conditions and experience of multi-notches rating transition across an array of issuers rated A3 or lower during the global financial crisis.

Issuers with long-term ratings between A3 and Baa2 almost always map to P-2 under Moody's standard mapping for long-term global ratings to short-term global ratings.

Deviations from this standard are intended to be exceptional; for instance when the combination A3 / P-1 is meant to signal an unusually high expectation that the issuer's long-term rating will migrate upwards.

In the case of the eight Malaysian banks, Moody's believes that conditions that would warrant any of these banks retaining a P-1 rating while its long-term rating remains at the A3 level are not present.

Taking into account today's announcement, the ratings of the eight affected banks are as follow:

CIMB Bank Berhad

Bank Financial Strength Rating (BFSR) of C-, which maps to baa2 on the long-term scale

Foreign currency deposits rated A3/P-2

Foreign currency issuer rated A3/P-2

Foreign currency senior unsecured debt rated A3

Foreign currency senior unsecured MTN rated (P)A3

CIMB Investment Bank

Local and foreign currency issuer rated A3/P-2

Hong Leong Bank Berhad

BFSR of C-, which maps to baa1 on the long-term scale
Local currency deposits rated A2/P-1

Foreign currency deposits rated A3/P-2

Foreign currency senior unsecured debt rated A3

Foreign currency senior unsecured MTN rated (P)A3

HSBC Bank Malaysia Berhad

BFSR of C-, which maps to baa1 on the long-term scale

Local currency deposits rated A1/P-1

Foreign currency deposits rated A3/P-2

Malayan Banking Berhad

BFSR of C, which maps to a3 on the long-term scale

Local currency deposits rated A1/P-1

Foreign currency deposits rated A3/P-2

Foreign currency junior subordinated debt rated Baa2 (hyb)

Public Bank Berhad

BFSR of C, which maps to a3 on the long-term scale

Local currency deposits rated A1/P-1

Foreign currency deposits rated A3/P-2

Foreign currency preference stock rated Baa2 (hyb)

RHB Bank Berhad

BFSR of D, which maps to ba2 on the long-term scale

Foreign currency deposits rated A3/P-2

Foreign currency senior unsecured debt rated A3

Foreign currency senior unsecured MTN rated (P)A3

Foreign currency other short term rated (P)P-2

Standard Chartered Bank Malaysia Berhad

BFSR of C-, which maps to baa1 on the long-term scale

Foreign currency deposits rated A3/P-2

CIMB Bank Berhad, headquartered in Kuala Lumpur, Malaysia, reported consolidated total assets of MYR 251.7 billion as of 30 September 2012.

CIMB Investment Bank, headquartered in Kuala Lumpur, Malaysia, reported consolidated total assets of MYR 4.4 billion as of 30 September 2012.

Hong Leong Bank Berhad, headquartered in Kuala Lumpur, Malaysia, reported consolidated total assets of MYR 155.6 billion as of 30 September 2012.

HSBC Bank Malaysia Berhad, headquartered in Kuala Lumpur, Malaysia, reported consolidated total assets of MYR 77.6 billion as of 30 September 2012.

Malayan Banking Berhad, headquartered in Kuala Lumpur, Malaysia, reported consolidated total assets of MYR 476.9 billion as of 30 September 2012.

Public Bank Berhad, headquartered in Kuala Lumpur, Malaysia, reported consolidated total assets of MYR 270.1 billion as of 30 September 2012.

RHB Bank Berhad, headquartered in Kuala Lumpur, Malaysia, reported consolidated total assets of MYR 161.4 billion as of 30 September 2012.

Standard Chartered Bank Malaysia Berhad, headquartered in Kuala Lumpur, Malaysia, reported consolidated total assets of MYR 49.4 billion as of 30 September 2012.

The principal methodology used in these ratings was Moody's Consolidated Global Bank Rating Methodology published in June 2012. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Additionally, the guidance in the Rating Implementation Guidance document "Moody's Global Short-Term Ratings" published on 24 October 2012 informed these rating actions.
(The Star Online)

Banks, APM, Bursa, Homeritz to attract trading interest

noreply@blogger.com (Unknown) — Thu, 31 Jan 2013 03:37:00 +0000

Hwang DBS Vickers Research (HDBSVR) expects Malaysian banks to see come under some selling pressure after Moody's Investors Service cut their short-term credit ratings.

The research house said on Thursday other stock names that would likely attract added interest were APM Automotive after it teamed up with a Japanese company in Thailand to make car seats in Malaysia.

HDBSVR added Bursa Malaysia would be announcing its quarterly financial results during lunch time.

As for Homeritz, it declared a single-tier final dividend per share of 2.25 sen translating to a net yield of 6.2% based on its last traded price of 36.5 sen On the market outlook, HDSBVR said Wednesday's market drop, which occurred despite all its regional peers posting positive performances, could mark a resumption of selling activity on the Malaysian bourse ahead.

"Looking technically vulnerable at the moment, the benchmark FBM KLCI (after hitting a low of 1,613 yesterday) may pull back deeper to test the support levels of 1,615 (first) and 1,600 (second)," it said.
(The Star Online)

Gold Prices (26th July, 2012)

noreply@blogger.com (Unknown) — Thu, 26 Jul 2012 12:00:00 +0000

Gold Price Malaysia (Malaysian Ringgits)

Conversion : 1 troy ounce = 31.1034768 grams

Malaysia News: Maybank IB sees boost for CPO prices

noreply@blogger.com (Unknown) — Thu, 26 Jul 2012 11:53:00 +0000

Soyaoil's premium to crude palm oil (CPO) has widened and this should encouraged substitution from soyaoil to palm oil, according to Maybank Investment Bank (Maybank IB). “If the US crop conditions worsen in the coming two-three weeks, there will be further upside to soyaoil, which might lift CPO prices as well,” it said in a research note yesterday.

It said while soyaoil price had further upside should soyabean crop prospects worsened, palm oil's discount to soyaoil was likely to stay high given that upcoming high production months for palm oil.
Maybank IB said according to the US Department of Agriculture, the US soyabean crop conditions had worsened for the seventh consecutive week. “Crop conditions for soyabeans had declined to their lowest since 1988, with only 31% of planted area nationwide rated good or excellent' and 35% rated poor or very poor',” it said.


Refined palm oil storage tanks Johor. Maybank IB says if the US crop conditions worsen, CPO prices may be lifted.

Maybank IB has maintained its average selling price forecast for the commodity at RM3,150 per tonne for this year and RM3,000 per tonne for 2013-14.

It has also maintained its “neutral” call on the palm oil sector over the next 12 months. (Bernama)

Malaysia News: Banks, ITFC discuss funds for emerging market traders

noreply@blogger.com (Unknown) — Thu, 26 Jul 2012 11:51:00 +0000

Three local banks are exploring ways to cooperate with International Islamic Trade Finance (ITFC) to provide trade financial solutions for Malaysian entrepreneurs doing business in emerging markets, including in Organisation of the Islamic Conference (OIC) and non-OIC countries.

Tujuh Keajaiban Middle East Free Zone Enterprise (TK) chief executive officer Krishnan Ramamurthi said the solutions being worked out were for entrepreneurs who wanted to increase their business turnover overseas.

TK is the appointed consultant for ITFC

“The banks are now in preliminary stage of discussion to tap the variety of trade financial solutions offered by ITFC,” he said.
The matter was one of the topics discussed at a recent trade delegation meeting with the banks held on July 16 to J18.
Institutuions such as Pelaburan Mara Bhd and Malaysian Investment Development Authority also took part in the discussion.

“The solutions that are being worked out focus on commodity trade finance, market access, country risk, logistics support, and counter party risk.

“We can expect to see some tangible results in the next quarter,” he said.

Some five small and medium companies involved in commodity trading had expressed interest in taking up the current solutions arranged by TK.

“Although the world is undergoing an economic crisis, there are still business opportunities in the emerging markets. Especially when there is a credit crunch, TK can come in to provide timely assistance tapping on the financial solutions of ITFC,” Krishnan said.

“TK provides unique services such as understanding, interpreting and providing solutions to risks identified for the entrepreneur, so that a proper risk-mitigated approach can be established both for lenders and well as borrowers.

“We also provide advisory services for foreign currency exposure mitigation, as all the borrowings are in US dollars and euro.” (The Star Online)

S&P gives A- rating to CIMB bonds

noreply@blogger.com (Unknown) — Thu, 26 Jul 2012 11:49:00 +0000

Standard & Poor's Ratings Services has assigned an A- unsolicited issue rating to CIMB Bank Bhd's recently-announced US$350mil 2.375% senior unsecured notes.
It said in a statement the notes would be issued under the bank's US$1bil euro medium-term notes programme with a tenor of five years.

“The rating on the notes reflects the long-term issuer credit rating on CIMB Bank,” it said. (The Star Online)

Bankers and lawyers should know better

noreply@blogger.com (Unknown) — Sat, 10 Mar 2012 12:46:00 +0000

BUYING a property that eventually becomes abandoned is a painful experience for many house buyers. It not only hurts purchasers who have lost their hard-earned money but also affects the property industry's reputation which has taken a beating due to unethical activities of a few culprits.

This is particularly so when the abandoned project is not caused by factors such as economic downturn or withdrawal of purchasers, but solely due to irresponsible people who claim to be “developers” but do not hold a licence to do so.

It was recently reported that our Housing and Local Government Ministry has identified 195 abandoned developments that were unlicensed in our country. I am puzzled as to how these “developers” are able to start their projects when they do not even have their licence to apply for financing if they require a bridging loan, and is their sales and purchase (S&P) agreement properly attested by a lawyer before they start selling?

In this context, what can be done and who should play a part in reducing these unlawful developers? Assessing our existing housing development process would provide us with some ideas.

When a developer plans for a housing project, he must first get the necessary approvals and licences from the relevant authorities such as the development order, building plan, advertising permit and developer's licence. The developer then may need to source for a bridging loan from a financial institution and this is followed by getting lawyers to prepare the legal documents which include the S&P agreement.

When the project is launched to the market, the developer will require the purchasers to sign the S&P agreements in order to finalise the purchase. Should the purchaser acquire a housing loan from a bank, the bank will come into the picture to process the loan application submitted by the purchaser. Those are the basic procedures involved in developing and marketing a housing project in Malaysia.

For unlicensed development, the regulatory bodies are not in the picture. In such cases, it becomes apparent that the lawyers and/or bankers, both representing the house purchaser, have a role to play as the first line of defence to protect the interest of the purchaser.

Hence, there are questions that begged to be answered. How is it possible for financial institutions to approve the end financing loan for a property development in the absence of all or part of the required approvals and licences? The same questions are posted to lawyers who prepare the legal documents for unlicensed development.

I believe everyone has a role in identifying irresponsible players in the industry, especially the bankers and lawyers with their better access to information and strong regulatory network as compared to the general public. As a purchaser and a customer, you would have expected your banker and lawyer to carry out their due diligence duties to ensure that your interest is not compromised.

In other industries, professional practitioners who do not convey the right message and do not protect customers' interests can be given stern punishment as their action may be deemed as negligence, fraud or even criminal breach of trust.

According to the record of National House Buyers Association, in the case of Keng Soon Finance Bhd (1996), a financial institution had granted a loan to an unlicensed developer, and it was decided that the loan and the security offered were invalid. The bank could not institute the foreclosure proceedings on the land and therefore could not recover its loan.

Under our Housing Development Act, a property developer that engages in, carries out or undertakes housing development without having been duly licensed can be fined between RM250,000 and RM500,000 or to imprisonment for a term not exceeding five years or both. This is an avenue to take action against unlicensed developers. While we have the law in place, it is equally important to ensure strong enforcement comes along.

For house buyers, you are strongly advised to purchase property from reputable developers and to do thorough “shopping” and analysis before signing on the dotted lines. Responsible developers are keen to work hand-in-hand with purchasers and appreciate the role of the National House Buyers Association which advocates the protection of house buyers in Malaysia. We should stand together as a team to fight against irresponsible developers.

And for anyone of you who think that you have bought into one of those unlicensed developments mentioned earlier in the article, it is time to write and call your banker or lawyer for clarification.
Datuk Alan Tong is the group chairman of Bukit Kiara Properties, he was the FIABCI World president in 2005-2006 and was named Property Man of The Year 2010 by FIABCI Malaysia.( The Star Online)

Malaysia Gold Price as for 9th Mar 2012

noreply@blogger.com (Unknown) — Sat, 10 Mar 2012 12:43:00 +0000

Conversion : 1 troy ounce = 31.1034768 grams

New lending guidelines won’t slow growth

noreply@blogger.com (Unknown) — Thu, 24 Nov 2011 04:26:00 +0000

THERE may be more forms to fill, disclosure to listen to and information to absorb, but the new responsible lending guidelines is the right direction to go.

Loan growth by banks should not slow noticeably because of the new measures.

The economy is growing nicely and job creation and salary bumps will mean more credit demand.
There will, however, be those who will feel that the checks being put in place is the wrong way to go.
Sure, people will complain that banks will not let them borrow more money even though the potential borrower might feel they can repay their debt.

But the new guidelines serve as a mechanism to keep household debt in check.

Household debt is on the high side at 77.6% of GDP but there is one silver lining. Household liquid assets at the moment is more than sufficient to cover their debt.

The bulk of household debt is held by households with a monthly income of more than RM5,000 a month and although the more you earn would indicate more leeway in dealing with debt, the idea of putting the brakes on household debt is more preventive than anything else.

We have all seen what runaway debt in households can cause. South Korea dealt with it when it went through a credit card crisis in 2003 and in June this year, applied more checks to slow down its own bourgeoning household debt problem which has arguably the highest debt-to-GDP ratio in the developed world.

For Malaysia, the lessons of South Korea is plain to see. The authorities there took action with one eye on the ramification of such a high debt build-up.

Should debt become too high and unmanageable here, it will affect the economy. Let's not go through the obvious scenario where a sharp slowdown in economic growth will spell trouble for households and banks.
Growing debt in itself would naturally crimp on a household's ability to consume and with domestic consumption, where private sector expenditure is a large part of, a big locomotive for the economy, then any danger to it must be managed.

Households should know that when interest rates rise, repayments will go up too. Households which have been accustomed to low interest rates might be feeling that the current low borrowing cost regime might be here to stay but the reality is that nobody knows.

It's likely that interest rates will remain depressed for a long time but it will eventually rise one day and that day of reckoning is something we, the banks and the economy should be cognisant of. (The Star Online)

Opportunity to expand Islamic finance offerings

noreply@blogger.com (Unknown) — Mon, 14 Nov 2011 04:51:00 +0000

As international markets are perched precariously on the edge of a global financial abyss, a small window of opportunity has sprung up for Malaysia to spread its Islamic finance wings internationally.

“There is an opportunity now but the window is small,” International Investor country publisher Cory D'Abreo said, an observation seconded by the Global University of Islamic Finance (Inceif) president and chief executive Daud Vicary Abdullah.

“The pendulum of power is swinging towards the east and right now it is in the Middle East. So they are beginning to flex their muscles,” Daud said, adding that before the Middle East took hold of the international Islamic finance, Malaysia should grab the chance to promote its Islamic finance sector globally.

Sharing views at the recent International Investor Islamic Finance Roundtable, he added that the Middle East had an inferiority complex towards the west previously but “that is slowing stripping away as they become more vocal about wanting things done the syariah-compliant way”.

He also said that Malaysians, in turn, had an inferiority complex towards the Middle East when it came to Islamic financial services and products and therefore, were hesitant about venturing beyond local shores.
On the local Islamic finance milestones, Securities Commission Islamic Capital Markets executive director Zainal Izlan Zainal Abidin noted that growth had been fanned by more industry players achieving economies of scale and greater product innovation and development.

“Islamic finance has been growing rapidly (here) in the past two decades but there needs to be another growth driver (to sustain growth momentum). We believe having more syariah-based approach, which means more risk-sharing structure, will propel the growth,” he said.

“The projection for the growth of Islamic capital market (ICM) in Malaysia is 10.6% per year for the next 10 years from the size of about RM1 trillion (valued last year). This would take the value of the Malaysian ICM to almost RM3 trillion,” he said, adding that this would encompass about 60% of the total local capital market.

Zainal added: “From the capital market perspective, we are looking at ways to drive expansion not just through product range but also specificities of the products like having more foreign currency issuance as well as funds in more varied sector funds to cater to a wider audience.” (The Star Online)

Australia Central Bank Cuts Key Rate to 4.5% in First Reduction Since 2009

noreply@blogger.com (Unknown) — Tue, 01 Nov 2011 04:16:00 +0000

Australia’s central bank lowered its benchmark interest rate today for the first time since April 2009 as inflation eases and weaker global growth threatens to slow the nation’s resource-driven economy.

“Recent information suggests the subdued demand conditions and the high exchange rate have contained inflation,” Reserve Bank of Australia Governor Glenn Stevens said in a statement after reducing the developed world’s highest borrowing costs by a quarter of a percentage point to 4.5 percent. Sixteen of 27 economists surveyed by Bloomberg News predicted the move; the rest forecast no change.

The cut, which sent the nation’s currency and bond yields falling, reflects a decline in the nation’s underlying inflation rate to the weakest in 14 years as Europe’s debt crisis dims prospects for the world economy. Stevens joins Group of 20 counterparts from Jakarta to Ankara to Brasilia in easing monetary policy as they seek to bolster domestic demand.

“With overall growth moderate, inflation now likely to be close to target and confidence subdued outside the resources sector, the board concluded that a more neutral stance of monetary policy would now be consistent with achieving sustainable growth and 2 percent to 3 percent inflation over time,” Stevens said.

Currency Falls

The Australian dollar dropped to $1.0487 at 2:54 p.m. in Sydney from $1.0530 yesterday in New York and $1.0527 before the decision. The yield on 10-year government bonds fell nine basis points, or 0.09 percentage point, from yesterday’s close to 4.42 percent.

Australian Prime Minister Julia Gillard said the decision brought “welcome relief” to households. Westpac Banking Corp. said its lower borrowing costs announced today would save customers A$41 monthly on a A$250,000 mortgage.

China is Australia’s biggest trading partner and its demand for iron ore, coal and energy has driven the nation’s terms of trade, or export prices relative to import prices, to a record. Earlier today, the China Federation of Logistics and Purchasing said a manufacturing index fell in October for the first time in three months.

Across Asia, “trade performance, however, is starting to see some effects of a significant slowing in economic activity in Europe, where the prospects are for economic weakness to continue,” Stevens said in today’s statement.

Mining Boom

Australia’s overseas shipments and a A$430 billion ($450 billion) pipeline of resource projects helped spur the local currency to $1.1081 on July 27, the highest level since it was freely floated in 1983.

Europe’s fiscal troubles have weighed on the so-called Aussie in recent months. The world’s fifth most-traded currency fell 10 percent last quarter on concern Greece would default and trigger a repeat of the 2008 credit freeze after the collapse of Lehman Brothers Holdings Inc.

European Union leaders agreed on Oct. 27 to increase a bailout fund to 1 trillion euros ($1.4 trillion), recapitalize banks and write down Greek debt by 50 percent.
Stevens today noted stronger recent economic data in the U.S. and signs that Europe is getting its fiscal turmoil under control. “But it is likely to be some time yet before concerns about the European situation can definitively be laid to rest and the effects of the recent turmoil on confidence may result in a period of precautionary behaviour by firms and households,” he said.

Lower Inflation

An Australian government report last week showed the average of two core measures of consumer prices closely watched by the RBA was a 0.3 percent gain in the three months through September, the smallest rise since the third quarter of 1997.

On an annual basis, the two measures averaged about 2.5 percent, the mid-point of the central bank’s target of 2 percent to 3 percent inflation.

Economists including Bill Evans at Westpac and Kieran Davies at Royal Bank of Scotland Group Plc predict the RBA will lower its inflation forecasts when it releases its quarterly monetary policy statement on Nov. 4.(Bloomberg)

Gold Price today 28th October 2011

noreply@blogger.com (Unknown) — Fri, 28 Oct 2011 04:32:00 +0000

Malaysian Ringgits per Gram

Malaysian Ringgits per Kilo

Regulators close four banks in the United States

noreply@blogger.com (Unknown) — Mon, 24 Oct 2011 04:17:00 +0000

NEW YORK: Regulators closed four banks in the United States on Friday, including one in Colorado with over US$1bil in assets, bringing the total number of closures this year to 84.

The largest of the failed banks, the Community Banks of Colorado, had US$1.38bil in assets and US$1.33bil in total deposits as of June 30, the Federal Deposit Insurance Corp said. It is the largest bank to fail since Aug 19, 2011.

Bank Midwest, NA, Kansas City, Mo, agreed to assume all the deposits of Greenwood-based Community Banks of Colorado and to purchase essentially all of he assets. Its 40 branches will reopen on Saturday as branches of Bank Midwest.

The Federal Reserve Board, which appointed the FDIC as the receiver of the Colorado-based bank, said it had been “critically undercapitalised” since July 29.
Among other banks to fail on Friday included two in Georgia and one in Florida.
In Georgia, regulators closed Community Capital Bank in Jonesboro and the Decatur First Bank in Decatur.

State Bank and Trust Co, Macon, Ga, has agreed to assume the deposits and purchase essentially all of the assets of Community Capital Bank, which as of June 30 had US$181.2mil in assets. State Bank and Trust Co is a subsidiary of State Bank Financial Corp .

Fidelity Bank, Atlanta agreed to assume all of the deposits and purchase essentially all of the assets of Decatur First Bank. Decatur First Bank had about US$191.5mil in assets, and US$179.2mil in deposits as of the end of the end of June.

In Florida, regulators shut down the Old Harbor Bank in Clearwater, and entered into an agreement with 1st United Bank of Boca Raton to assume the bank's deposits and purchase almost all of the assets.(Reuters)

Banks need to train more people in Islamic banking

noreply@blogger.com (Unknown) — Mon, 24 Oct 2011 04:16:00 +0000

KUALA LUMPUR: The need to educate more staff on Islamic banking products and services is apparent as Malaysia moves towards becoming a hub for Islamic finance, said Islamic Banking and Finance Institute Malaysia (IBFIM) senior consultant in training and professional development Zanariah Zahari.

She said while the country retained a dual-banking system to cater to conventional and Islamic banking needs, employees with Islamic banking knowledge were not many as compared to conventional banking staff.

“There is a demand for staff who know the products. We have a lot of products but a lot of the people selling them do not fully understand them,” she said.
Zanariah said staff promoting Islamic finance had to be able to give customers the full details of the products and services so that they could decide what to sign up for under conventional or Islamic banking.

She noted that although there were many staff trained in conventional banking moving to Islamic banks, they would need more education on the Islamic services.
“We can refer to scholars on what is halal and what is not but it is very difficult to get good scholars who can also see the business side of their knowledge,” she said, adding that employees at all levels needed to know the products well enough as customers expected them to.

She added: “(Islamic banking) is very competitive now in Malaysia. Not only do the individual Islamic banks have to compete with their conventional sister banks but also full-fledge Islamic banks like Al Rajhi.”

Zanariah noted that Bank Negara had set up institutions like IBFIM and International Shari’ah Research Academy (ISRA) to train bank employees on Islamic finance and was also monitoring the industry to ensure all banks were sending their staff for training.

However, banks have also taken the initiative to educate their employees instead of relying only on the central bank.

On maintaining a dual-banking system, she said it was because the local market segments required both types of financial services.

“Also, we learn from countries like Pakistan and India where the full conversion to Islamic banking did not work out,” she said.(The Star Online)

KL’s edge in Islamic finance

noreply@blogger.com (Unknown) — Tue, 18 Oct 2011 04:16:00 +0000

German don: Malaysia’s comprehensive regulatory framework a competitive advantage

KUALA LUMPUR: Malaysia's competitive advantage in Islamic finance is its comprehensive regulatory framework, according to a German economics professor.

“Malaysia has the necessary ingredients to be a hub for Islamic finance, such as its capital adequacy requirements, good governance and disclosure policies that are able to meet European financial standards,” said International Centre for Education in Islamic Finance (INCEIF) governing council member Prof Dr Volker Nienhaus.

“The German Bundesbank (central bank of Germany) has even sent its representatives to Malaysia's Securities Commission for training on Islamic finance.”

He said in comparison, the Gulf countries - the other major players in Islamic finance - have surplus liquidity but not capital adequacy. Their legal framework was also uncertain, he said. Nienhaus was speaking at a public lecture on Opportunities for Islamic Finance in the Arab Spring, Asian Summer and European Autumn, organised by INCEIF, Bank Negara's Islamic education arm.

Nienhaus: ‘Malaysia has the necessary ingredients to be a hub for Islamic finance.’

However, Nienhaus cautioned against excessive government intervention in the growth and adoption of Islamic finance, citing the example of Pakistan which took a top-down approach and ended up creating a less-efficient replica of its previous financial system.

“It took them 10 years to reverse this, and now Pakistan maintains a dual financial system,” he said.

Nienhaus said the Arab spring in North Africa and the Middle East had opened up opportunities for the growth of Islamic finance in the region as its current financial system was deficient and did not provide support to the entrepreneurial middle class.

Its existing banks were mainly tied to the discredited elites and focused on trade financing, he said. “Once the political unrest dies down, there will be huge market potential in the Middle East, especially in areas like financing for new businesses and takaful for the young, growing population.”

On Asia's prospects, Nienhaus said although there were concerns the economic slowdown in Europe and the United States would have some spill-over effects in the region, its impact would likely be moderate.

“Much of the trade and growth in Asia is Asian growth, it is within Asia,” he said.

He also argued that the failure of the current global financial system, as seen in Europe and the US, has fostered a more open outlook toward alternative financial systems like Islamic finance.

“Something is clearly wrong with the credibility of the (mainstream) banking sector. Previously, stress tests failed only eight banks and we thought we were safe. Now, the latest news appears to say that almost all banks are bankrupt,” he said.

He said there were notable markets for Islamic finance in Europe owing to the sizeable Muslim populations there, including the United Kingdom (two million Muslims), France (five million), Germany (three million), and the largest in Russia (17 million), as well as smaller numbers in Luxembourg, Belgium and the Netherlands.

He added that each country however had varied approaches to Islamic finance, with some facilitating retail operations and others disregarding it completely.(The Star Online)

Allowing higher foreign shareholding of local banks likely to be on a case-by-case basis

noreply@blogger.com (Unknown) — Tue, 18 Oct 2011 04:13:00 +0000

Reciprocity on bank stakes

PETALING JAYA: Allowing foreign banks to hold higher stakes in local banks may be an issue of reciprocity but it will probably give local banks a run for their money.
Bankers contacted in a random poll said they were unaware of such a move and opined that a clearer picture on any liberalisation of the current shareholding structure would probably emerge next year.

It was reported over the weekend that Bank Negara may liberalise the foreign shareholding in domestic banks, which currently stands at 30%, under the second leg of the financial services masterplan.

This move, expected on a case-by-case basis, is apparently aimed at preparing local banks for regional expansion and helping them tap opportunities within the Asean region.

“Of course, there will be some nationalistic feelings but in the end, it is up to the regulators and government how they see the sector evolving and what they want out of it,'' said an industry observer.

Foreigners will want a bigger piece of the pie; they are usually part of a global group that will provide the support, resources, talent pool and products that will challenge the locals to work harder.

“Liberalisation in this aspect can result in an intense situation where the market will be crowded and there will be competition for talent,'' said analysts.
Early this year, Reuters reported from Australia, quoting Prime Minister Datuk Seri Najib Tun Razak that he was open to the idea of Australia and New Zealand Banking Group (ANZ) increasing its stake in AMMB Holdings Bhd to 49% from about 24%.

Reciprocity became an issue in the case of Indonesia considering a rule to limit the foreign shareholding in its banks.

It is suggested that such issues be solved at the level of the Asean banking framework; nevertheless, Malaysia may be studying its implications from a country's perspective.

In April, foreign ownership limit for investment banks, Islamic banks and takaful companies was raised from 49% to 70%.

Besides ANZ's stake in AMMB Holdings, other notable foreign shareholding in domestic banks include:

Temasek's effective stake in 14.5% in Alliance Financial Group (AFG); Temasek owns 49% in Vertical Theme Sdn Bhd, the holding company that owns 29% in AFG. The other 51% in Vertical Theme is held by local firm Langkah Bahagia Sdn Bhd.
Aabar Investments PJS's 25% stake in RHB Capital; Aabar is sister company of Abu Dhabi Commercial Bank which had earlier bought the block.

Bank of East Asia's 24% stake in Affin Holdings Bhd.

As part of the liberalisation, licences have been awarded to banks from different countries but these represent relatively small start-ups. Buying a higher stake in established domestic banks represent a different ballgame in a bigger arena.
Other areas of focus in the upcoming masterplan involve responsibilities of directors, CEOs and senior management under a strict corporate governance framework and the development of a dynamic Islamic banking hub in Malaysia.(The Star Online)

Bank of Korea retains rates

noreply@blogger.com (Unknown) — Fri, 14 Oct 2011 04:08:00 +0000

SEOUL: South Korea's central bank has kept interest rates unchanged as the global economy weakened and insisted it had not abandoned its tarnished inflation-fighting credentials, although it gave few clues on its next move.

The Bank of Korea kept the base rate unchanged at 3.25% for a fourth consecutive month.(Reuters)

Yuan-denominated sukuk by Khazanah

noreply@blogger.com (Unknown) — Fri, 14 Oct 2011 04:07:00 +0000

PETALING JAYA: Khazanah Nasional Bhd has issued its first offshore yuan-denominated sukuk of 500 million yuan (RM246mil) via Danga Capital Bhd, a Malaysian-incorporated special purpose vehicle.

The three-year benchmark sukuk was priced through a book-building process on Oct 13 and at the tightest end of the price guidance at 2.90%, the company said in a statement.

The transaction drew a demand of 3.6 times book size, enabling Khazanah to upsize the deal to 500 million yuan from an earlier announced 300 million yuan.
Khazanah said its investors comprised financial institutions, asset management companies, private banks and statutory bodies from Malaysia, Singapore, Hong Kong, the Middle East and Europe.

Issued under the Malaysia International Islamic Financial Centre initiative, it is the world’s first Emas Sukuk denominated in yuan. The sukuk will be listed on Bursa Malaysia (Exempt Regime) and Labuan International Financial Exchange.(The Star Online)

New service charter for commercial banks

noreply@blogger.com (Unknown) — Fri, 14 Oct 2011 04:06:00 +0000

PETALING JAYA: The Association of Banks in Malaysia (ABM) has introduced a standardised template for a customer service charter for commercial banks to improve efficiency and accountability towards consumerism.

The initiative, a collaboration between ABM and its members, is the next service launched following the well-received partner initiative last year which focuses on streamlining and simplifying processes and procedures of loan applications for small and medium enterprises.

Executive director Chuah Mei Lin said that aside from improving standards of service and build stronger customer-banker relationship, “the customer service charter also sets out the time frames within which a customer can expect the banks respectively to deliver the services highlighted”.

“In this manner, customers will be better equipped to set their expectations accordingly when conducting business with a particular bank,” she added, acknowledging that banks had to keep up with customers’ needs and maintain high-standard customer service in the competitive banking climate.

With the charter, customers can review all the information furnished and use the turnaround times as a comparative tool to select banking services.
Most member banks have posted their charters on their website and banking halls and a standardised template can be found on ABM’s website too.(The Star Online)

Malaysia Budget 2012 highlights

noreply@blogger.com (Unknown) — Mon, 10 Oct 2011 04:33:00 +0000

KUALA LUMPUR, Malaysia - Highlights of Budget 2012 tabled by Prime Minister Datuk Seri Najib Tun Razak in Parliament Friday.

- Last year our FDI growth was the strongest in Asia and in the first 6 months of this year have already reached RM21.2bil (S$8.7 billion)

- In 2012, private investment is forecast to climb 15.9%, supported by foreign and domestic investment

- GDP in the first 6 months of 2011 was 4.4%, driven by strong domestic consumption

- In 2011, the economy is forecast to grow by 5-5.5%

- Private and public investment are forecast to increase by 15.9% and 7%, supported by foreign investment, the ETP and 10MP

- In 2012, the service sector is expected to grow 6.5%, the construction sector 7% and GDP is forecast to be between 5 and 6%

- Budget 2012 allocates RM232.8bil for Government plans, including RM181.6bil for management and RM51.2bil for development

- RM29.8bil has been allocated for investment in infrastructure, industrial and rural development

- RM13.6bil has been allocated for the social sector, including education and training, welfare, housing and community development

- Total revenue for 2012 is forecast to increase 1.9% to RM186.9bil and the deficit to decrease to 4.7% of GDP from 5.4% in 2011

- The theme for Budget 2012 is “National Transformation Policy: Welfare for the Rakyat, Well-Being of the Nation”

- We will focus on accelerating investment and further liberalise 17 services sub-sectors, in places enabling 100% foreign equity.

- RP2 will be implemented in 2012, and it will be allocated RM98.4bil, to be split evenly between 2012 & 2013

- RP2 main projects will include the East Coast Highway from Jabor to T'ganu and road upgrades from Kota Marudu to Ranau

- RM18bil of the RM20bil PPP Facilitation Fund will be used for high impact projects, with RM2 billion for bumiputera entrepreneurs

- In 2012, the Government will allocate RM978mil to accelerate the development in five regional corridors

- The Treasury Management Centre will be established and offer incentives to develop M'sia as a competitive financial centre

- We will develop the Kuala Lumpur International Financial District, with incentives including income tax exemptions for firms

- We will develop the Kuala Lumpur International Financial District, with incentives including income tax exemptions for firms

- Income tax exemptions for non-ringgit sukuk issuance and transactions will be extended for another 3 years

- To promote the development of Exchange Traded Funds products I-VCAP will provide RM200mil for Shariah-compliant ETFs

- Felda GVH will be listed on Bursa Malaysia by mid-2012 to raise funds for the company to become a global conglomerate. Felda settlers are expected to receive a windfall, and the amount will be announced before listing

- A RM2bil shariah-compliant SME Financing Fund managed by selected Islamic banks will be established in 2012

- A RM100mil SME Revitalisation Fund offering loans up to a maximum of RM1mil for entrepreneurs will be available from Jan 2012

- Full exemption of import duty and excise duty on hybrid cars and electric cars will continue to be given until 2013

- To promote tourism, the Langkawi Five Year Tourism Development Master Plan will be launched with an allocation of RM420mil

- The real property gains tax will be reviewed so it doesn't jeopardise the ability of low- and middle-income groups to buy homes

- The Malaysia Healthcare Travel Council will be privatised to promote and develop Malaysia as a healthcare destination

- Budget focuses on developing human capital, creativity and innovation and 2012 will be the National Innovation Movement year

- The Govt has allocated RM100mil promote innovation including the 1Malaysia Award (C1PTA) for innovative student inventions

- To enable SMEs to commercialise research products a Commercialisation Innovation Fund totalling RM500mil will be established

- RM50.2bil will be allocated to the education sector so that it can continue to develop talented, creative and innovative people

- RM1bil will be provided through a special fund for the construction, improvement and maintenance of schools

- We will abolish payments for primary and secondary education, making these free for the first time in our history

- Private schools registered with the Education Ministry will be given incentives including an Investment Tax Allowance

- The Govt will give tax exemption for contributions to educational institutions and all places of worship

- To encourage private sector human capital development incentives including a double deduction on scholarships will be offered

- Budget 2012 introduces a Rural Transformation Programme, so that rural areas can attract private investment and create employment

- RM5bil to develop rural infrastructure, including RM1.8bil to the Rural Road Programme & Village-Link Road Project

- RM500mil to expand the programme to supply clean water to the rural community in Sabah

- RM400mil to upgrade the water supply infrastructure in selected Felda areas - To provide greater access to bank services for the rural population, Bank Simpanan Nasional will appoint agents in rural areas

- RM90mil for the Orang Asli for basic necessities, including the expansion of the clean water supply project. For the Orang Asli affected by the landslides at Sungai Ruil, RM20mil is provided for their relocation to new homes

- 600,000 Govt pensioners will benefit from an additional annual pension increment of 2%

- Civil servants get pay rise between RM80 to RM320

- Govt will extend the compulsory retirement age from 58 to 60 years old to optimise civil servants' contribution

- Civil servants will be offered tuition fee assistance for part-time studies, including 5,000 masters and 500 doctoral scholarships

- A special programme will be introduced for 175,000 army personnel who are not eligible for pensions

- RM3,000 will be given to ex-members of the special constable and auxiliary police as well as widows and widowers

- The Govt is mindful of the plight of the rakyat due to rising food prices and will take measures to address this

- The National Agro-Food Policy 2011-2020 will be launched and RM1.1bil allocated for the development of the agriculture sector

- In the spirit of “People First,” all subsidies, incentives and assistance totalling RM33.2bil will be continued

- 500,000 will benefit from KAR1SMA, which provides assistance to poor senior citizens and children and disabled people

- My First Home Scheme will be expanded to increase the limit of house prices from a maximum of RM220,000 to RM400,000

- Govt will identify areas in the vicinity of MRT, LRT and other public transport to be developed by PR1MA

- Govt will continue to implement the Program Perumahan Rakyat by building 75,000 units of affordable houses

- Govt will establish the Special Housing Fund for Fishermen to build and refurbish houses

- Healthcare will be allocated RM15bil operating expenditure and RM1.8bil development expenditure

- Hospitals will be upgraded and constructed as well 81 rural health clinics upgraded and 50 new 1Malaysia clinics launched

- Hospital Kuala Lumpur - the oldest in Malaysia - will be upgraded to be the country's premier hospital

- Skim Amanah Rakyat (SARA) 1Malaysia will benefit 100,000 households with income below RM3,000 per month

- To assist taxi owners facing increased operating costs, measures will be introduced including tax exemptions on taxi purchases
- The National Legal Aid Foundation will ensure that every individual who is charged in court will be given free legal aid

- To assist the homeless, the Govt established a social assistance centre known as Anjung Singgah

- A training allocation of RM10mil will be provided for women to develop leadership and managerial skills

- To prevent cervical cancer, the Government will provide free Human Papilloma Virus immunisation nationwide

- MyCreative Venture Capital with an initial fund of RM200mil to be established - RM15mil will be allocated to build 150 futsal courts to achieve the “One Court for One Mukim” target

- To ensure the welfare of retirees measures including a tax relief on Private Retirement Schemes contributions are introduced - Senior citizens aged 60 years & above will be exempted from outpatient registration fees in Govt hospitals & health clinics

- One-off assistance of RM500 to households with a monthly income of RM3,000 and below will be provided - For those in private sector earning RM5000 and below, employers' EPF contribution will increase from 12% to 13%

- Book voucher worth RM200 will be given to Malaysian students in all private and public institutions of higher learning

- Civil servants will be given an additional bonus of half-month salary and pensioners RM500

Source:Asia One News

Maybank: Budget will promote Islamic banking

noreply@blogger.com (Unknown) — Mon, 10 Oct 2011 04:24:00 +0000

The 2012 Budget will further promote the comprehensive development of conventional and Islamic banking, insurance and takaful, investment banking and other financial services in terms of the range and offerings of products and services, Maybank president/chief executive officer Datuk Seri Abdul Wahid Omar said.

“We are extremely pleased that the Government continues to give a high priority for the growth and development of the financial services sector.

“Budget 2012 is no exception given the slew of tax incentives for the setting up of treasury management centres, sukuk issuance and transactions, private retirement scheme, exchange-traded fund, Skim Amanah Rakyat 1Malaysia and the development of Kuala Lumpur International Financial District,” he said in a statement on Friday.

Wahid, who is also chairman of the Association of Banks in Malaysia, said the budget was most comprehensive and reflected the Government’s effort to strike a balance between dealing with people, cyclical and structural issues.

He said the banking industry was grateful for the tax incentives for companies providing structured internship programme and scholarships as well as participating in careers fairs abroad.

This was because human capital development and attracting and retaining talent were one of the key issues facing the banking/financial services sector, he said.
Wahid said the further liberalisation of services sector would further promote financial services sector by enhancing the country’s post-industrialisation development strategy.

He said the review of Real Property Gains Tax (RPGT) was a good move to ensure macroeconomic and financial stability as well as social justice by curbing speculative activities and preventing excessive rise in property prices. “This is also balanced with incentives and allocations for the purchases and provisions of affordable and public housing schemes.”

Wahid also welcomed the Government’s commitment to reduce the budget deficit in 2012 to 4.7% of gross domestic product compared with 5.4% in 2011.(Bernama)

Investors assess new UBS CEO

noreply@blogger.com (Unknown) — Tue, 27 Sep 2011 04:44:00 +0000

ZURICH: UBS investors welcomed the Swiss bank's choice of caretaker chief executive, Sergio Ermotti, after Oswald Gruebel resigned in the wake of a US$2.3bil rogue trading scandal and cleared the way for a major overhaul of the investment bank.

Shares in UBS climbed steadily as fund managers and analysts digested news that the job of clearing up after the crisis had been handed to Ermotti, who joined UBS in April after being passed over for the top job at Italian bank UniCredit.

“Ermotti is not the most risk averse he used to make some big trades (at Merrill Lynch). But he does know how to manage risk,” said a Geneva-based investment adviser who has worked with Ermotti in the past. “He has the experience and he's motivated.”

Shares in UBS, which staged a relief rally late last week on hopes the UBS board might decide on a big restructuring, were up 4.3% at 10.6 francs by 0927 GMT yesterday, recovering from initial losses and tracking the European sector banking index which also rose 4.3%.

“Although the new CEO will no doubt take some time to develop a restructuring plan, we believe that hopes of a much more substantial downsizing of the investment bank, freeing up significant capital, will help support the shares in the short term,” said Nomura analyst Jon Peace.

Gruebel, 67, resigned on Saturday, saying he was taking the blame for the scandal. But there was speculation he had clashed with the UBS board on strategy.(Reuters)

Malaysia Gold Price as at 22nd September 2011

noreply@blogger.com (Unknown) — Thu, 22 Sep 2011 04:28:00 +0000

Gold Price Malaysia (Malaysian Ringgits)

Conversion : 1 troy ounce = 31.1034768 grams

Malaysian Ringgits per Kilo

Malaysian Ringgits per Gram

Is free debt consolidation services hoax or it real works?

noreply@blogger.com (Unknown) — Fri, 02 Sep 2011 10:06:00 +0000

Millions of Americans have incurred overwhelming debts in the post economic depression. For these debt laden consumers hiring the debt consolidation services is a feasible option. If you consolidate your debts then you can eradicate your owed amount without the bankruptcy stigma. But with the rising of the consumer debts there is mushrooming growth of the hoax debt relief companies. The scam companies are targeting the vulnerable debtors and extract money from them. Therefore, before you enroll in a debt consolidation program make sure that the company is authentic. You should acquire information on the type of loan the company offers and the people associated with the company. In this way you can avoid the associated yourself with a scam company.

If you want to know whether your debt consolidation company is reliable you can browse through the internet and get information on the company. You can get the required information from the company website like the location of the company or services offered by it. The testimonials received from the clients can help you form an idea about the company. You can also look for a feedback forms from the past clients to get genuine facts about the consolidation company.

You can approach the Better Business Bureau to find out if there are any complaints lodged against the debt consolidation company you are enrolling with. The BBB can warn you if they received any complaints, lawsuits or negative feedback from the clients against the company. You can consult with the former clients and ask them about their experience with the respective company you are seeking help from.

Try to get help from free debt consolidation services but you should be sure that you are working with a reliable debt consolidation company. Usually, the debt consolidation services are non-profit agencies as the government helps the financially crippled debtors without earning a profit. This helps to build a strong relation for better customer services. (Blog guest: Myrina Stein)