ISRA blooms, wither INCEIF???

The Central Bank of Malaysia i.e. Bank Negara Malaysia(BNM) announced their new Syariah Council line-up for 2010/2013.

Amirul HM is quite surprised that nobody from INCEIF's faculty was named...."is it a slap on the wrist to INCEIF???"

Despite there being 2 members from ISRA (which is part of INCEIF), the fact that non from INCEIF is named to the board is a shocking revelation especially in view of the push by the powers that be to elevate INCEIF to a whole new level i.e. the premier Islamic Finance university/institution in the world....read, "the Al-Azhar, Harvard, Oxford or Cambridge of ISLAMIC FINANCE"

Am hopeful that this omission is an oversight by BNM considering that they have "easy" access to INCEIF's faculty due to INCEIF being their subsidiary and the amount that BNM have and about to pour into INCEIF rather than the announcement being a slap on INCEIF's faculty wrist. Am sure that the likes of Syed Othman, Syed Hamid, Saiful Azhar or even Obiyathullah would be able to add to the discourse.


The new Syariah Council consists of:-
# Tun Abdul Hamid Mohamad
- Former Chief Justice of the Federal Court, Malaysia;
# Tan Sri Datuk Sheikh Ghazali Abdul Rahman
- Shariah Legal Advisor, Attorney General Chamber;
# Dato’ Haji Hassan Haji Ahmad - Mufti of Penang;
# Dato’ Dr. Abdul Halim Ismail
- Executive Director of BIMB Securities Sdn. Bhd.;
# Dr. Mohd Daud Bakar
- Chief Executive Officer of Amanie Business Solutions Sdn. Bhd.;
# Prof. Madya Dr. Engku Rabiah Adawiah Engku Ali
- Associate Professor, International Islamic University Malaysia;
# Prof. Madya Dr. Mohamad Akram Laldin
- Executive Director of International Shariah Research Academy for Islamic Finance;
# Prof. Madya Dr. Ashraf Hashim
- Senior Researcher, International Shariah Research Academy for Islamic Finance;
# Dr. M. Anwar Ibrahim
- Vice Chairman, National Shariah Board, Indonesia Ulama Council;
# Dr. Aznan Hassan
- Assistant Professor, International Islamic University of Malaysia; and
# Dr. Rusni Hassan
- Lecturer, International Islamic University of Malaysia

2nd Global Islamic Finance Forum(GIFF 2010), Attended!

Attended the 2nd GLOBAL ISLAMIC FINANCE FORUM 2010 (GIFF 2010) at the Mandarin Oriental Hotel, Kuala Lumpur - Malaysia for 2 days i.e. from 25-26 October 2010. The theme for this year is " Islamic Finance: OPPORTUNITIES for TOMORROW ".

It was refreshing for me that the organiser chose to highlight another verse from the Al-Quran rather than the Al-Baqarah verse commonly used/associated with Islamic Finance during the Al-Quran recitation prior to the start of the Opening Ceremony.



It is not often that 3 speakers ( Malaysian Prime Minister cum Finance Minister 1, Governor of the Malaysian Central Bank & HRH the MIFC Ambassador) speak when opening a forum, no matter how distinguished they are. Hence, I can't help but feel a sense of deja vu when HRH Raja Nazrin (MIFC Ambassador) spoke at length on the Hijrah especially when he had spoken about it on a similar vein in the Inaugural Securities Commission - Oxford Centre for Islamic Studies(SC-OCIS) Forum in March 2010. Read SC-OCIS Forum 2010



For me the highlight of GIFF 2010 must be the signing of the Articles of Agreement for the Establishment of the International Islamic Liquidity Management Corporation (IILM). The Articles were signed by Eleven(11) Central Banks and Two(2) Multilateral Organisations. Whilst the impact of IILM on IF would not be felt immediately by the IF industry, trust me when I say that its reverberation and "green foot mark" would come in the months if not years to come.

Also, of significance are Remarks by Tun Dr. Mahathir (Malaysia's 4th Premier) and Tan Sri Andrew (Economic Advisor) on GOLD and its linkages to the World economy should be noted with circumspect.

All in it was a good forum as I caught up with some old contacts from the IF industry, friends and I'd made new friends as well...prominent amongst them is Senator Reverien Ndikuriyo from Burundi as its not often you get to meet representatives from Burundi in IF forums or Conferences.


"HALAL FINANCING/ISLAMIC FINANCE by AHM" BLOG APPRECIATION:
I would like to put on record my appreciation to the GIFF 2010 Secretariat for the kind invitation. It is my fervent wish that the GIFF Secretariat invites me to future events and access to all the other sessions as well.

"HALAL" Certificate for IF Instrument Proposed at 7th KLIFF!

Attended the 7th Kuala Lumpur Islamic Finance Forum (KLIFF 2010). Theme for this year is " ISLAMIC FINANCE: Authenticity, Innovation & Reach ".



The last session i.e. Session 7 for KLIFF 2010 is "SHARIAH Session".
Panel members consists of Sheikh Essam Ishaq (Bahrain),Dr. Mohammed Abdul Rahim Sultan (UAE), Dr. Mohd Daud Bakar (IIIF-Malaysia)and Dr. Engku Rabiah Adawiah (IIUM-Malaysia) . Assoc. Prof. Akram Laldin (Executive Director, ISRA) was the Moderator.

During Q&A for the last session titled "SHARIAH DIALOGUE"....I was given the privilege of asking the first question to the panelists during the second round of questions.



I'd suggested that since there are Halal Certificates for the food industry, why can't a similarly modified "Halal" Certificate along the lines of the 4 mazhabs be introduced for IF instruments/issues.

Elated that my Suggestion for a "Halal" Certificate for Islamic financial instruments and/or issues along the lines of the 4 mazhabs(as opposed to a general Syariah Council ruling) were received favorably by the Shariah Panelists...even from Middle East scholar Sheikh Essam Ishaq from Bahrain. Dr. Engku Rabiah even said that this will make the IF instrument even more transparent.

Dr. Akram Laldin-ISRA's Executive Director/ Session Moderator even asked me to clarify further my proposal from the floor. I clarified further my earlier question/suggestion by saying - " IBF products/contracts popular in certain countries or regions like the Al-Bai' Bithaman Ajil (BBA) can still be marketed and securitised as they appeal to a niche set of Muslim investors. Hence, the differences in opinion can be used to grow the industry even further as certain individuals/funds will still invest as long as the instrument/contract complies to a just one sect or mazhab."

I'd earlier touched on this Halal Certificate matter in my earlier blog posting on 19th May after attending the 6th WIEF when suggesting the introduction of the " IBF Compliance Certification "

TQ Shariah Panelists for the positive responses and CERT for the kind invitation

4th International Islamic Capital Market Forum, Attended!

Attended the 4th International Islamic Capital Market Forum with the theme " Sukuk: Transferring the Best Practices " at the Securities Commission, KL.




It was good to receive updates on the sukuk. It can be said that negative conotations like "arbitrage" between Islamic and conventional finance and "helah fiqqiyah(legal devices)" is starting to creep-in or is rampant...depending on who you talk to!



Good to have met up with my former Islamic Jurisprudence lecturer whilst doing my PDIBF in IIUM i.e. Prof. Hashim Kamali (now the founding CEO of ISRA) and also my former Syariah Advisor whilst I was with EON Finance Berhad/EON Bank Group i.e. Dr. Mohammad Deen Mohd Napiah ( now Maybank Islamic Syariah Advisor). Also, IF practitioners like Wan Rahim (SC), Ust. Nurdin(SC), Afifudin (OSK), Wan Rizaidy (Bursa)and others.

Looking forward to the 5th International Islamic Capital Market Forum



BLOG APPRECIATION:
TQ to SC's Islamic Capital Market & SIDC for the kind invitation.

" Gearing for Economic Resurgence ". 6th WIEF-KL, Attended!

LINKS:-
1) WIEF - World Islamic Economic Forum
2) 6th WIEF 2010, Kuala Lumpur

Judging by the attendance of Presidents(Indonesia,Kosovo, Maldives and Senegal), Prime Ministers( Bangladesh and Malaysia )and the Sultan of Brunei in addition to the various facets of the plenary and parallel sessions available, the 6th WIEF have certainly evolved into a premier world-class economic forum for the international muslim community.

In Islamic Banking & Finance there seems to be a concerted effort and common mantra in calling for harmonisation of products and standards for IF products. Tun Musa Hitam started the ball rolling even before WIEF proper.

This is similar to the clarion call by most speakers be they from UK or Malaysia in the Inaugural SC-OCIS,UK Forum I'd attended in March 2010 at the Securities Commission.

Whilst I'm not opposing to the frequent calls for harmonisation, I have to disagree on how it is to be done. Why can't harmonisation be done in another manner....as I strongly believe in the "Unity in Diversity" idea. Why do Muslim countries have to "gear" their products in accordance to the oil-rich gulf countries edicts!!?? There is no one size fits all solution.

For example, an IBF Compliance Certification for products and services offered can be introduced similar to a halal certificate for food and cosmetics products. The compliance certification will then indicate whether the pertinent IBF product is in compliance with the teachings of Sunnah and any or all of the 4 mazhabs(Syafie, Maliki, Hanafi & Hambali). Wheteher the IBF product is in compliance with the edicts of Shiah will also be indicated. When the IBF Compliance Certification is introduced, then sophisticated Muslim investors can decide as to whether they want to invest in a particular IBF product or not whilst at the same time leaving the room for IBF innovation open for further advancement.

Hence, IBF products/contracts popular in certain countries or regions like the Al-Bai' Bithaman Ajil (BBA) can still be marketed and securitised as they appeal to a niche set of Muslim investors altogether. In addition, the BBA can take its place as a product/contract which helps in the asset-building process of an Islamic financial institution. I hope, the MIFC can take-up this proposal and introduce it as part of their capacity building initiatives.......SOON!



BLOG APPRECIATION:

On an end note, I will like to thank Iskandar Development Region authorities for the kind invitation extended to me to attend the 6th WIEF in KL.

Capacity Building - Time for IF UNIVERSITIES/INSTITUTE RANKINGS!

LINKS:
MALAYSIAKINI(Malay)
QS ASIAN UNI Rankings 2010
The Star

Again,One of Malaysia's if not the world's top university in Islamic finance i.e INCEIF were NOT included in the recent QS Asian Universities Rankings 2010.

In October 2009, I'd commented on the need for a WORLD UNIVERSITIES RANKING for Universities/Institutes offering IF training and programmes .

The inclusion of my alma matter i.e. IIUM is a welcomed relief.

Islamic Finance is one of the few areas where Malaysia have a Comparative Advantage compared to the rest of the world.

Having confidence in its Islamic Banking system, BNM via MIFC should now further consolidate its first-mover advantage by introducing and/or sponsoring a World universities/Institutions rankings for IF. Am sure the 2 named universities...if not other local universities will feature in the top 50 IF institutions if such a ranking were introduced.




BNM & MIFC, please expedite the Rankings for IF Universities and Institutes, less the advantage will be lost







Note:



Author's comments re IF rankings at the Times Higher Education website. Refer:-



http://www.timeshighereducation.co.uk/story.asp?storycode=408560


comment under the name of "Amirul HM" on 21st October 2009.

MALAYSIAN Capital Markets Conference, attended!

UPDATED - 12 April 2010
As per comments by various presenters during the inaugural Conference last year...the RM has indeed strengthened!

Attended a 1 1/2 day inaugural Conference titled " MALAYSIAN CAPITAL MARKETS -Preparing for the Investor and Issuer Resurgence post-Credit Crisis " organised by International Financing Review(IFR) - THOMSON REUTERS at the Shangri-la Hotel, KL from 7-8 October 2009.

Common Themes:-

• ISLAMIC FINANCE - Growing Importance & Fast Growing Segment
( e.g 3years to establish IF on World Markets as opposed to 10years for Euro currency)
• ECONOMIC Recovery - Crisis is over....optimism compared to previous year!
• Indonesia - play on Indonesia..growing importance on the heels of China & India. 3rd Force!

Among the comments passed by Presenters:-

• RM becoming more attractive and is expected to strengthened
• Yen losing its lustre as a carry-on Currency
• Malaysia is the 3rd largest bond Market in Asia (The top being Japan )

Presenter's comments on IF / Development:-

• Commodity Murabaha - growing importance and acceptance as a means to manage IF's liquidity.
• IF as an alternative - IF was relatively unscatched (except for a few isolated incidences) during the 2008/2009 Global Financial crisis
• Sukuk Market - Emergence of Malaysia as World Sukuk Leader.
• Emergence of South Korea(presenter from KEXIM & participants from Korea such as Shinhan Asia) & France on the global IF map.

IF Blog COMMENTS:

Overall, it was a good conference to attend especially to update oneself of the latest scenario/ development in the Malaysian capital market - both conventional & Islamic.

I would suggest that in future, the Organisers should adhere more to certain protocol and/or customs e.g. asking for a show of hands as to who will attend lunch and listing VIP guests together with Conference participants in the same category is a definite "boo-boo".

PS: Good to bump into a Senior i.e. OP Effendi Abdullah of AmInvestment Bank.
Last met when he was an Assistant General Manager many years ago prior to my departure from EON's Islamic Banking Division.
Now, Director/Head - Islamic Markets & Public Sector

SC-OCIS Inaugural Forum, Attended!

( SC - OCIS Forum )

Attended the 1-day Inaugural Securities Commission(SC)- Oxford Centre for Islamic Studies(OCIS) Forum(SC-OCIS Forum).

My Comments and/or Suggestions on Certain Points Raised by Forum's Speakers:-
1)Both HRH Raja Nazrin (Crown Prince of Perak, Malaysia and MIFC Financial Ambassador) & Tan Sri Zarinah Anwar ( Chairman, Securities Commission)in their speeches call for an urgent harmonisation of syariah principles or fatwas to move the IF industry forward. To this, I would respond by:-

A. Introduce an IF COMPLIANCE CERTIFICATE
- This proposed certificate will be in the form of a Syariah Council/Advisory Board declaration that the product is accepted or rejected by the various mazhabs. Hence,intended users or buyers can decide for themselves as to whether they want to be associated with a particular Islamic Finance product or NOT!

B. Have a Journal Publication (...perhaps organised by SC's Islamic Capital Market Unit and/or ISRA) highlighting why certain IF contracts are accepted or rejected by the various mazhabs. In this way, we would not limit certain IF contracts like the BBA but also expand the IF market accordingly. After all, there is no one size fits all solution and we should not just accommodate certain line of reasoning just to attract funds.

2) Ahmad Hizzad bin Baharuddin (Islamic Banking & Takaful, BNM) - The Bank Negara Malaysia(BNM) needs to conduct an audit or, set a benchmark for AMGIA Profit-Sharing Ratios(PSR) and/or Rate of Returns(RoR).This is because the PSR seems to be coming down as opposed to when the Interest-Free Banking Scheme ( or SPTF) in Malaysia were initially introduced in 1993. In addition, certain comments have been put forward that the ROR declared seemed to be within a certain band of the conventional banking system's Fixed Deposit rates. Perhaps BNM could organise an awards ceremony for Banks having high Mudharabah PSR and/or PSR as per the Unit Trust Industry with their annual "The Edge-Lipper Award" as an example.


On the whole, despite being an inaugural effort, it was a good Forum for both Practitioners & Academicians/Researchers to update oneself of the comparative situation in Malaysia/ASEAN vis-a-vis UK/Europe. Points made by Dr. Abbas ( ...I've spent my lifetime keeping islamic radicals out and now you want to let them in by implementing IF ) & Rafe Haneef from Fajr Capital,UK ( ...you can take the mountain behind me brother as an asset/collateral)is refreshing and brings to light the realities on the ground when pitching for IF jobs.

Always a pleasure to meet familiar faces within the IF industry like Afifudin(OSK-formerly BIMB/BIRT when I first knew him), Dr. Daud Bakar(Amanie B.S. - EON Finance Consultant), OP Efendi(AMMB), Zuljastri(IIUM - RHB/Kwong Yik Bank)& a fellow college batchmate i.e. OP Wan Suhaimi (MIDF.

Halalfinancing/Islamic Finance by AHM BLOG Appreciation:
TQ En. Wan Rahim (Advisor, SC-Islamic Capital Market)& SC for the kind invitation.

LINKS to this event:-
MSN News

Question/Comment on IBF at 44th Public Bank AGM!!!

I attended the 44th AGM of Public Bank Berhad(PBB) in KL.

A shareholder posed a question/passed a comment related to PBB's Islamic Banking & Finance(IBF) operations. The question/comment was along the lines of - "...Maybank had purchased a bank in Pakistan to further enhance their IBF operations, what have PBB done to "beef up" this particular area?..." The shareholder(who claimed he was from Ipoh,Perak) was the 1st shareholder invited from the floor to comment. He was also commenting on the flattish growth of PBB share prices compared to other Banks like CIMB, Maybank & Hong Leong and had even suggested that the Board talk to a few parties(e.g. Hong Leong & EON Capital) to merge their operations.






What for me is quite surprising was not that the question on IBF was posed at all BUT,the fact that:-
1) PBB is a predominantly Chinese-owned bank; and,
2) Shareholder who asked the question was a Chinese.

I supposed, when a system is considered "just & equitable"...people will take notice especially after the IBF system having escaped the 2008-2009 global financial turmoil relatively unscatched!