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!

IF World Universities RANKINGS! - Need for a Capacity Building initiative by MIFC

Malaysia's top universities in Islamic finance like the International Islamic University of Malaysia(IIUM) and
The International Centre for Education in Islamic Finance (INCEIF) which was accorded University status
were NOT included in the Times Higher Education's World Universities Rankings 2009.

The exclusion of INCEIF is not surprising considering it's a new university. However, the exclusion of IIUM of which is one of my alma matter IS!???

Islamic Finance is one of the few areas where Malaysia have a Comparative Advantage to the rest of the world having:-

• Set-up the Pilgrims Management Board (popularly known as Tabung Haji) in 1969 with the enactment of LEMBAGA URUSAN DAN TABUNG HAJI ACT 1969 ( which has subsequently Repealed by the Tabung Haji Act 1995,


• Incorporated the first Islamic Bank & Takaful company (Bank Islam & Takaful Malaysia respectively ) in 1983; and,


• Introduced the dual banking system vis the Interest-Free Banking Scheme(SPTF) in 1993; and,


• Opened-Up the Islamic Banking System to foreign Islamic Banks in 2004 even earlier than what was required for the conventional banking system under the WTO liberalisation .

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.......SOON!

Over to you BNM & MIFC.

Note:

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

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

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

"INDONESIA - Access to Islamic Finance for SMEs" - WORLD BANK RFP

The WORLD BANK has recently issued a Request for Proposal (RFP), titled:-

" INDONESIA - Access to Islamic Finance for SMEs "

( Project Code TF 093571 #8038 )

6 organisations/firms have been short-listed to prepare the RFP. They are:-

1. Deloitte Consulting Malaysia Sdn Bhd ( MALAYSIA )
2. e.Gen Consultants Ltd. ( BANGLADESH )
3. Frankfurt School of Finance & Management ( GERMANY )
4. NORC
5. PLaNet Finance ( FRANCE )
6. P.T. Ernst & Young Advisory Services ( INDONESIA )

Considering the West's animosity towards Islam and anything-related to Islam, the RFP is certainly an interesting development.

The Author is of the view that the World Bank's RFP initiative highlights the emergence and importance of both:-

• INDONESIA
  ~ as an attractive Investment destination. Based on available data at the ASEAN Secretariat(ASEC) and Economic Research Institute for ASEAN & East Asia(ERIA)...both located in Jakarta, Indonesia is one of the few ASEAN countries that is expected to chart positive economic growth in 2009.
  Note: Author was an Intern at The ASEAN Secretariat in 2009 and visited ERIA in July 2009 ( refer ERIA Blog Post on 2 July 2009)



• ISLAMIC FINANCE (IF)
  ~ as a preferred source of financing. It is highly probable that the World Bank have taken cognisance of the fact that IF have remained largely intact and unscatched in the present economic downturn, unlike its conventional banking and finance cousins who's taken a terrible beating!
  
  

Note:
via an e-mail dated 22nd August 2009,
Blog Author received an invitation to participate in this RFP by one of the 6 firms shortlisted by the World Bank.

CAPACITY BUILDING for IF in MALAYSIA & ASEAN

Am writing a Chapter titled " Capacity Building for Islamic Finance in Malaysia & ASEAN ". Assoc. Prof. Dr. Hamidin Abd. Hamid (Dep. Executive Director of the Asia-Europe Institute, U.Malaya) will be my supervisor for this topic.

Research thus far have only churn out 1, ... that's right ONLY ONE Journal Article of note i.e. an ILSP- Harvard Law School article by S.Nazim Ali titled " Islamic Finance and Economics as Reflected in Research & Publications ".

Other pertinent non-journal articles includes:

1. BNM - 8 July 2009;
   " Governor's addrsss at the Malaysia-UK Islamic Finance Forum "
   
2. AIBIM - 1 June 2009;
   " Islamic Banking in ASEAN: don't fly too high!

Triangulation approach is the research methodology method to be used for this topic. The approach will however be more skewed towards the qualitative aspects i.e. interviews.

Places/Persons where Interviews on IF were conducted to-date:

A) INDONESIA - Jakarta & Bandung ( May - July 2009 )

• ASEAN Secretariat, Jakarta.
  Interviewed/Talked to 9 persons from different levels i.e. Secretary-General of ASEAN, Directors, Dep.Directors, Asst. Directors, Senior Officers & Technical Officers.


• ERIA, Jakarta. Also, refer 2 July 2009 blog article.


• ITB, Bandung . Also, refer 2 July 2009 blog article.


• CIMB Niaga Bank, Bandung

B) MALAYSIA - Kuala Lumpur

• Tan Sri Sanusi Junid


• Prof. Saiful Azhar Rosly


• Mr. Khairil Abdullah

Appreciate any suggestions for me to proceed further on this topic especially on recommended journal articles, conference papers etc.

WASALAM & THANK YOU.