5 Interactive Distance Learning Programs on Islamic Banking and Finance

Saturday, March 28, 2009

Gambia: Takaful Opens New Branch in Farafenni

Alhagie Babou Jallow
The governor of North Bank region, Mr Edward Seckan, recently inaugurated a new branch of Takaful Insurance Company in Farafenni.

Speaking at the ceremony, Governor Seckan called on the people of his region to join the Takaful Insurance Company Limited. He said that in modern day economy, insurance has been recognised as essential tool which will help in the growth and development of a nation.

Governor Seckan said The Gambia is a predominant muslim country and speculations about conventional insurance in The Gambia, will become a thing of the pass. He called on the people of his region to support Takaful Gambia as it is in accordance with Islam. He noted that this insurance which is 95% owned and managed by Gambians is a move in the right direction and a pride to government.

For his part, the chief of Sabah Sanjal, Mam Biran Gaye, noted that Takaful Insurance's consistance with commitment and promotion of Islamic financing is laudable, following the successful establishment of Islamic Banking in The Gambia. He called on his people to patronise the insurance company.

For his part, the managing director of Takaful Insurance Company Gambia Limited, Modou Joof, who is a native of Farafenni, said Takaful Gambia has been incorporated in October 1st 2007, as the first Islamic insurance company in The Gambia and commenced business operation from Thursday 24 January, 2008 under the relevant laws of The Gambia.

He said, Takaful as a business venture is based on Islamic profit-sharing principle of 'Mudabah'. "In this regard, clients of Takaful shall be entitled to earn from contributions paid in consideration for the term of participation in Takaful provided by Takaful, subjected to the declaration of profit by Takaful Gambia Limited," he said. This he said, will certainly give a special added advantage to the insuring public that has never been available.


Takaful disposing KL property to Exim Bank

PETALING JAYA: Islamic insurance company Syarikat Takaful Malaysia Bhd is disposing an 18-storey building in downtown Kuala Lumpur to Export-Import Bank of Malaysia Bhd (Exim Bank) for RM63 million.

In an announcement to Bursa Malaysia Friday, Takaful Malaysia said the sale would unlock gains of RM543,000 and allow the company to focus on its principal activities of managing family and general takaful businesses.

According to details in the announcement, the 20-year old building has a total lettable area of 99,021 sq ft and is almost fully occupied.

The current monthly rental income is RM386,176 or an average rental rate of RM3.92 per sq ft.


Can Islamic banks save the world?

Islamic banking could help Europe and the world survive the global financial crisis, a leading spokesman has said.

Dr Ahmed Mohamed Ali, president of the Islamic Development Bank (IDB), said that stabilising global markets is a priority for East and West alike.

He told bankers and financiers at Mansion House that a principle of Sharia law is that money should measure rather than create value.

And he noted that Islamic banks control £720 billion worldwide, have grown by 10% to 15% growth in the past few years and already have close ties with London.

Meanwhile, efforts by UKTI and other Government agencies to nurture Islamic banking are recognised by the Top 500 Islamic Financial Institutions report, which rates the UK as the number-one western destination for Islamic finance.

Dr Ahmed Mohamed said that the global crisis makes it “even more vital for policy interventions to promote financial inclusion and enhance access of the poor to financial services.”

UKTI Islamic Finance specialist Richard Thomas said: “The principles underpinning Islamic finance have seen it relatively unscathed by the global financial crisis, and there is also much information to share on international financial stability.”

The Lord Mayor of the City of London, Ian Luder, said: “The growing partnership between London and financial centres across the Muslim world shows the importance of the sector in assisting the world's many Muslims to engage with the global financial system in ways compatible with their faith, particularly at this time of global economic downturn.


Friday, March 27, 2009

Market volatility to affect financial sector

Banks will find it challenging to sustain revenue base

THE domestic financial sector is bracing for greater challenges in 2009 due to moderating economic growth and volatility in financial markets.

Sustained risk aversion may result in continued low trading liquidity in specific asset classes. Credit spreads in the corporate bond market may widen further, resulting in higher cost of funding.

Furthermore, corporate earnings have started to decline and weaker employment prospects could translate into broad-based increases in delinquencies and fraud, triggering a credit cycle downturn.

As credit outlook weakens and demand for financing, financial products and insurance protection moderates, Malaysian financial insititutions will face significant challenges in sustaining their revenue base.

Banking institutions will need to balance prudent standards and provide continued support to customers, particularly in easing temporary cash flow pressures.

Counter-cyclical practices will only exacerbate the economic conditions, which will in turn impact the bank’s balance sheet.

Meanwhile, domestic financial groups with regional operations will not only see lower profit contributions, but face new channels of risk transmission.

Nonetheless, revenue contribution from overseas remained small, at 11% of the banking system’s pre-tax profit.

Financial groups with foreign partners, however, have benefited in terms of increased sophistication in risk management capabilities and technology.

Similarly, the Malaysian insurance and takaful sector will also be affected by lower demand and higher competition.

In particular, the expected decline in vehicle sales will negatively impact the motor insurance and takaful business, which constitutes 45% of gross premium in 2008.

Premiums are also likely to be affected by the potential increase in surrender rates and lower sum insured. Claims are projected to intensify due to higher incidences of theft and fraud, as well as due to maintenance faults.

To face the rising challenges, Bank Negara has increased its supervisory and surveillance capacity to detect potential problems at an early phase and allow for pre-emptive actions.

While structural changes in the global and domestic financial landscapes have increased the complexity and inter-linkages in the financial system, Bank Negara closely engages other central banks, monetary authorities and supervisory agencies to monitor and respond, when necessary, in a coordinated manner.

Moving forward, macroeconomic surveillance and supervisory activities will continue to focus on several key areas:

  • Strengthening the robustness of risk transmission assessments from external developments to the local financial market, businesses, households and financial sectors, as well as spillovers of distress from non-regulated entities and markets;
  • Enhancing ongoing scenario analyses at both the system and individual institution levels;
  • Strengthening engagement and communication with various stakeholders including regulatees, business associations, small and medium enterprises (SMEs) and other regulatory authorities to enable early identification of signs of distress and emerging risks. This include ensuring continued access to financing;
  • Ensuring pre-emptive action plans are in place and implemented in effective manner; and
  • Intensifying regional and international cooperation and coordination in supervisory and regulatory activities.

  • --the star online

    Wednesday, March 25, 2009

    Assets Of Financial System Increase To RM2.58 Trillion

    The assets of the financial system in the country at end-2008 increased to RM2.58 trillion from RM2.476 trillion at end-2007.

    The banking system, which includes Islamic banks, registered pre-tax profit of RM19.17 billion last year, up from RM17.701 billion in 2007, according to Bank Negara Malaysia (BNM) in its Financial Stability and Payment Systems Report released here today.

    The 2008 figures are preliminary figures.

    BNM said pre-tax profit for the commercial banks, which include finance companies and Islamic banks, increased to RM18.489 billion from RM15.655 billion previously.

    The economic slowdown adversely affected the investment banks as their pre-tax profit dropped to RM681.1 million from RM2.046 billion previously.

    Meanwhile, pre-tax profits of the Islamic banking system, excluding one Islamic bank that made exceptional loss, fell to RM1.810 billion from RM1.894 billion.

    The report said the number of financial institutions in the banking system rose to 54 last year from 47 in 2007, mainly because of the increases in Islamic banks (to 17 from 11) and investment banks (to 15 from 14).

    The number of people employed in the banking sector rose to 114,856 in 2008 from 109,641 in 2007, with the bulk of them in commercial banks (up to 99,593 from 96,146).

    On the life insurance sector, the report said, the industry's total income fell to RM26.779 billion last year from RM28.440 billion in 2007, while its outgo increased to RM19.238 billion from RM14.617 billion.

    It said the general insurance sector's operating profit fell to RM588.9 million in 2008 from RM1.339 billion in 2007.

    Maenwhile, the family takaful income rose to RM2.834 billion from RM2.376 billion, while outgo rose to RM1.294 billion from RM1.441 billion.

    The general takaful operating profit rose to RM171.6 million from RM24.5 million.

    -- BERNAMA

    Saturday, March 21, 2009

    4th Asian Takaful Conference promoted by Aarkstore Enterprise

    Takaful seems to have become a fundamental part of the insurance landscape and is growing from strength to strength, within the region and internationally with more players sprouting up even in the West and North America.

    With the global financial crisis raging, Islamic finance seems to have been relatively unscathed. Takaful still remains a viable option, if not a more attractive option now for both Islamic as well as conventional clients. Asia Insurance Review, therefore together with our Lead Sponsor B.E.S.T Re is putting together the next Asian Takaful Conference this year to address the challengesand opportunities facing takaful in the current global financial crisis. The conference, supported by International Cooperative and Mutual Insurance Federation (ICMIF) & the International Insurance and Takaful Companies Federation (FIITC) will look at the theme, "The New Takaful Landscape in the Current Global Financial Crisis".

    However, takaful players together with regulators and rating agencies must remain vigilant to ensure that proper risk management practices are in place to determine solvency and capital requirements.

    The 4th Takaful Conference will look at issues that affect the Takaful industry in this current financial crisis �' the growth potential, corporate governance, maintaining solvency, the role of regulators in ensuring a balanced regulatory framework, and the operational and strategic challenges faced by takaful operators. There will be special panel discussions on issues like surplus distribution, as well as a comparison between how takaful is run in Asia and the Middle East. The conference will touch on the need to boost standards in the takaful world and offer real value to consumers while making sure the industry remains effi cient, competitive and compliant. There will be a sharing of success stories in the arena as well as the factors limiting the growth of takaful and retakaful.

    Sign up today for this important event to learn from the leaders and to find out how to sharpen the edge of your takaful business and how to make it a serious platform for success. The conference is expected to attract takaful as well as conventional companies from around Asia including insurance and reinsurance companies, Islamic banking institutions, regulators, Shariah scholars, consultants, brokers as well as service providers keen to tap the potential of the takaful market. We hope to see you in Singapore.

    Who Should Attend

    * Life & General Insurance & Reinsurance Companies (both Takaful and Conventional)
    * Takaful Companies and those providing Takaful insurance services
    * Islamic Banking Institutions & Islamic Finance Players
    * Regulators
    * Shariah Scholars
    * Management Consultants
    * Reinsurance & Insurance Brokers
    * Service Providers to the Takaful industry, ie lawyers, technology companies, loss adjusters, etc.


    Bailout Fallout: Uncle Sam's Sharia Board

    By Diana West :
    At your service, American Taxpayer! AIG's Shariah Advisory Board. Meet Moe, Larry and Curly. I mean, Mohamed, Muhammad, and Mohammed.* As members of the AIG Takaful Shariah Advisory Board, they really work for you and me, the American taxpayer, ever since we the people bought an 80 percent stake in the bankrupt insurance company.

    How's that for bait and switch? While we agonize over chump-change AIG bonuses, we ignore the fact we're paying for the subversion of liberty and justice for all by funding AIG's promotion and entrenchment of sharia--Jew-, Christian-, and humanist-hostile supremacist Islamic law. As of December 2008, by the way, AIG Takaful insurance products went on sale in the USA under the ironically named Lexington Takaful Solutions.

    Lexington, Lexington--wasn't that where our experiment in liberty began with the shot heard round the world? Must have been a dream. At this rate, Lexington will go down in history as the beachhead of US taxpayer-funded sharia. From "taxation without representation" to taxation to support sharia: How the free have enslaved themselves.

    But back to the Sharia team on Unlce Sam's payroll.

    Mohamed #1 is Mohamed Ali Elgari, born Makkah, Saudi Arabia. The AIG Takaful website boasts that he's the winner of "the Islamic Development Bank prize in Islamic Banking and Finance for the year 1424H."

    1424H? That's 2004 for infidels. (Do the Islamic math here.)

    Someday, we'll consider Elgari's career trajectory typical. That is, where once our elites went from say, Groton to Yale College to Harvard Law School, now, pace Elgari, they go from from King Abdulaziz University in Saudi Arabia to the OIC to Harvard Law School. There, not far from the statue of John Harvard, the crews rowing on the Charles, and, of course, Harvard Yard, the Saudi sits on "the advisory board of Harvard Series in Islamic Law."

    In other words, the cancerous advance of sharia into our institutional organs has already reached a critical stage.

    Read about the rest of AIG's Sharia Team here.

    Note that Muhammad #2's bio, first crack out of the box, informs us that he is the son of "justice (Retd) Mufti Muhammad Taqi Usmani." Papa Usmani is indeed a world-noted and prolific sharia scholar, whose works include the book Islam and Modernism where he wrote: “Killing is to continue until the unbelievers pay jizyah (subjugation tax) after they are humbled or overpowered.”

    Don't ask me why AIG thinks that's a irresistible sales pitch for life insurance.

    Paul Sperry reports on Usmani the Elder and his jihadist activities--and his abrupt disappearance in 2008 from the Dow Jones sharia team after said jihadist activities began to be reported--here. Funny how proud of him AIG still is.


    Thursday, March 19, 2009

    Insurance firms' business rises

    Graham Morrall (SUPPLIED)
    Shveta Pathak
    Corporates are getting increasingly interested in insurance products and firms involved in offering such products are witnessing a rise in the share of business from this segment, said a leading life insurance player.

    "In spite of current economic problems, premiums – particularly on the corporate segment – have not declined. In fact, in case of corporate customers, it's the opposite," Graham Morrall, Regional Head of Distribution, Middle East and Africa, Zurich International Life (ZIL) told Emirates Business.

    The region, with its low insurance penetration, mainly due to cultural reasons and awareness levels, held high potential for insurance industry, he said.

    "In terms of number of new companies, or companies that are not our clients, enquiries have increased by over 50 per cent from levels in December. People are increasingly realising the need for protection. We have made significant stride in corporate business in the last three years in the Middle East. There are great opportunities here."

    "The requirements for Takaful (Islamic insurance) are there and cater to the segment. We announced in November last year that we would get involved in Takaful market," he said.

    He said insurance had become a major focus in the present economic scenario. "Protection has become a key focus for people. The economic crisis has hanged the outlook, people want to save more; they want to be protected."

    Unlike many other businesses, particularly the financial sector, that were going through a tough phase, insurance renewals had not been affected, added Morrall.

    He said the present economic crisis had led companies to focus on their core businesses.

    ZIL, said Morrall, was making efforts to reach the untapped market by widening its network, strengthening the competence of its distributors.

    --Business 24-7

    Islamic funds’ asset growth likely to slow

    The rate of asset growth of funds in Islamic financial institutions this year is expected to be slower than in 2008, says Kuwait Finance House (M) Bhd managing director Datuk K. Salman Younis.

    He said this was due to the prevailing global economic downturn but added that long-term recovery was certain.

    “We believe asset growth of Islamic funds will be back to its strong level once the global economy improves,” he said at the Dow Jones Islamic Market Indexes media briefing yesterday.

    Salman said there was huge potential for Malaysia to be the leading Islamic financial hub in the region and for Islamic financing to be the country’s key pillar of growth.

    According to The Banker, a global financing intelligence magazine, the top 500 Islamic financial institutions charted a 27.6% asset growth to US$639.1bil in 2008 compared with US$500.1bil the previous year.

    The major contributors to asset growth for Islamic funds are Gulf Cooperation Council (GCC) countries (US$262.7bil); Asia (US$67.1bil), led by Malaysia; Australia/Europe/the United States (US$35.3bil); and non-GCC Middle East countries, Middle East and North Africa (US$248.3bil).

    PricewaterhouseCoopers Taxation Services Sdn Bhd senior executive director (Islamic financial services practice) Jennifer Chang concurred with Salman’s view on Malaysia’s potential as the region’s Islamic financial hub.

    For instance, she said, Malaysia’s takaful industry had doubled in asset size over the last five years and its penetration rate was expected to reach 20% by 2010, compared with 6.5% currently.

    She added that Malaysia was the largest player with 20% share of the global takaful business worth US$4bil.

    Chang also said that as at end-November 2008, there were 149 Islamic funds domicled and managed in Malaysia, compared with 131 in Saudi Arabia.

    “This is despite Malaysia’s total Islamic assets under management being only US$4.64bil, compared with Saudi Arabia at US$13.9bil for the period under review,” she said.

    As at April 2008, the total Islamic assets under management worldwide is believed to be US$33.9bil.

    --The Star Online

    Allianz Takaful enters Bahrain

    Insurance giant Allianz has entered the GCC market offering Sharia-compliant products and services.

    Allianz Takaful, to be based in Bahrain, was launched during a ceremony attended by Central Bank of Bahrain governor Rasheed Al Maraj at Ritz-Carlton Bahrain Hotel and Spa.

    The event was also attended by German Ambassador Dr Hubert Lang, Allianz Takaful chairman Heinz Dollberg, chief executive Dr Abdul Rahman Khalil Tolefat and other dignitaries from the financial sector.

    'We will combine Allianz's global trust and expertise, and our local insights to create financial solutions of world-class standards,' Dr Tolefat.

    -TradeArabia News Service

    Tuesday, March 17, 2009

    Ratings Recap: Wing Lung, Sagicor, Empyrean Re, ARIG/Takaful, Exchange

    A.M. Best Co. has downgraded the financial strength rating to 'B++' (Good) from 'A-' (Excellent) and the issuer credit rating to "bbb+" from "a-" of Hong Kong's Wing Lung Insurance Company Limited (WLI). The outlook for both ratings is stable. Best said the "ratings reflect the company's solid business profile and liquid investment portfolio. WLI has established a stable market presence in the Hong Kong general insurance market. In 2007, the company was ranked ninth in the local market with a market share of 2.7 percent by gross premiums written. WLI remained the second largest participant in the general liability market, representing approximately 8 percent of market share." Best also noted that "WLI maintained a liquid investment position by holding approximately 77.2 percent of total invested assets in cash and fixed income securities as of September 2008. Going forward, it is expected that WLI will further increase its holdings in cash, which will play a key role in stabilizing its operating profitability. Offsetting factors include the significant reduction in WLI's capitalization due to the high investment losses and further deterioration in its underwriting performance as a result of the poor performance from unprofitable employee compensation (EC) business and the requirement to strengthen its claim reserves."

    A.M. Best Co. has affirmed the financial strength rating of 'A-' (Excellent) and issuer credit rating of "a-" of Barbados-based Sagicor General Insurance Inc. with stable outlooks. "These rating actions reflect Sagicor General's historically profitable operating performance, prudent underwriting leverage, regional market presence and parental support," Best explained. "Sagicor General benefits from the synergies derived as a member of the Barbados-domiciled Sagicor Financial Corporation (SFC) group and has the commitment and support of SFC, its ultimate parent and one of the largest financial institutions in the Caribbean. SFC is publicly traded on the London, Trinidad and Barbados stock exchanges. Sagicor General is among the largest property/casualty insurers in Barbados and has a significant presence in Trinidad and Tobago, Dominica, St Lucia and Antigua. Excluding catastrophe related losses, Sagicor General's disciplined underwriting and appropriate risk pricing have historically enabled the company to achieve favorable operating results. Partially offsetting these strengths is the high concentration of equities as a component of Sagicor General's investment portfolio, its reliance on reinsurance and the increasingly competitive regional insurance environment.

    A.M. Best Co. has affirmed the financial strength rating of 'A-' (Excellent) and issuer credit rating of "a-" of Bermuda-based Empyrean Re Ltd. , both with stable outlooks. Best concurrently withdrew the ratings at the company's request and assigned a category NR-4 to the FSR and an "nr" to the ICR. "The ratings of Empyrean Re are based on its excellent capitalization, experienced management team and sound business plan," said best. "These strengths are partially offset by the untested start-up nature and the mono-line orientation of the company." Best also explained that Empyrean Re operates as a Bermuda-based reinsurer writing direct, reinsurance and retrocessional trade credit coverage produced through the broker market. Though indications of market acceptance are positive following the company's second year of operations, the ability of Empyrean Re to effectively build and establish a successful market presence can only be proven over time. Best also views any concentration of invested assets as a source of potential problems. However, these concerns are partially mitigated by the experience of the management team, as well as the low underwriting leverage contemplated in Empyrean Re's business plan and the anticipated support of its owner and sponsor, Man Group plc. Man Group plc is a publicly traded global provider of alternative investment products and a constituent of the FTSE 100."

    Standard & Poor's Ratings Services has affirmed its 'BBB' long-term counterparty credit and insurer financial strength ratings on Bahrain-based non-life and life reinsurer Arab Insurance Group (B.S.C.) (ARIG). S&P then withdrew the ratings at the company's request, and it is no longer subject to ongoing surveillance. "At the time of withdrawal, the rating reflected the company's very strong capitalization despite the 19 percent reduction in shareholders' equity in 2008, and the company's good competitive position," S&P noted. "These factors were offset by marginal operating performance despite some improvement in the combined ratio, and execution risk relating to both business lines, and geographic expansion. The outlook at the time of withdrawal was stable and reflected our view that ARIG will maintain surplus capital in excess of the 'AA' (very strong) level in 2009. Also, the company is likely to continue to lag regional and international peers in terms of operating performance. In a related announcement S&P said that the ratings and outlook on Dubai-based reinsurer Takaful Re Ltd. (TRL; BBB/Stable/--) "are unaffected by the withdrawal of the ratings on Arab Insurance Group (B.S.C.) (ARIG) at ARIG's request. ARIG is the majority shareholder of TRL, with a 54 percent holding, and is also the major service provider."

    A.M. Best Co. has changed the financial strength rating to 'E' (Under Regulatory Supervision) from 'C' (Fair) and the issuer credit rating to "rs" from "ccc" of UK-based The Exchange Insurance Company Limited. "This action removes the under review with negative implications status originally assigned to the ratings in November 2008," said best. "The ratings of Exchange have been changed because the company has been placed into administration and due to the cessation of its normal activities as an insurance company. Exchange's management continue discussions with potential investors to sell the company. A successful conclusion to these talks will lead to a review


    Clyde and Co announces the addition of two new Middle East based partners

    Clyde and Co LLP has announced the addition of two new Middle East based partners; Peter Hodgins in the area of Islamic Insurance (Takaful) within Clyde and Co's Financial Services group and Scott Aitken as an Abu Dhabi Real Estate partner.

    Clyde & Co is one of the major international law firms in the GCC with over 160 specialist lawyers and paralegals operating as a single unit from offices in Dubai and Abu Dhabi in the UAE, and in Doha, Qatar.

    The firm is already exceptionally well recognised for both Real Estate and Insurance industry expertise in the Middle East, with team members named by multiple legal directories as leading lawyers in the region.

    Peter Hodgins is an insurance and reinsurance law specialist who worked for 10 years with the insurance practices of Clifford Chance and Reynolds Porter Chamberlain in London before moving to the Middle East in the summer of 2007.

    Peter has worked on a range of Islamic law matters, including Takaful and Islamic finance, in Dubai and Riyadh where he was involved in the establishment of DLA Piper's affiliation office prior to joining the corporate insurance practice at Clyde & Co at the start of 2009. The Middle East insurance group at Clyde & Co comprises six partners and twelve lawyers.

    Peter acts for both international and regional insurance interests, routinely acting for conventional insurers, Takaful operators, brokers and third party administrators in relation to the establishment, licensing and regulation of insurance operations in the GCC. He has extensive experience in developing new insurance products and has been involved in the development of both general and family takaful products for use in the GCC and beyond.

    Scott Aitken is a real estate specialist who heads a team of four lawyers in the firm's Abu Dhabi office advising on on-shore and off-shore structuring for ownership, leasing and/or licensing.

    In particular Scott acts for owners and operators in the branding of hotels and related residential developments and advises owners and operators of shopping malls, commercial buildings and labour camps in relation to all aspects of facilities management services including leasing, asset, property and facilities management. Included amongst Scott's major clients are some significant local banks.

    Scott joined Clyde & Co as a consultant in December 2007, following 5 years with Australian law firms Clayton Utz and Mallesons Stephen Jaques where he was involved in a wide range of top-level Australian property work. Prior to entering the law, Scott spent some 15 years working for a major Australian bank across four jurisdictions.

    --AME Info

    UAE Stocks Slip; Drake & Scull Tumbles 26 Per Cent on Debut

    DUBAI - Property and construction stocks dragged UAE shares down on Monday. Engineering and construction contractor Drake & Scull plunged 26 per cent below its offer price on its trading debut. The Dubai Financial Market benchmark index ended 1.04 per cent lower at 1,509.7. The Abu Dhabi Securities Exchange main index inched down 0.74 per cent to 2,311.11.

    “The rest of the Dubai market drifted lower in the absence of retail focus, but the index managed to close above the 1500 level which is becoming a key psychological point,” said Matthew Wakeman, managing director at EFG Hermes.

    Arabtec Holding, the country’s biggest construction company building the world’s tallest skyscraper in Dubai, retreated 2.38 per cent to Dh1.64.

    Index heavyweight Emaar Properties, the largest property company in the Middle East, shed 1.46 per cent to Dh2.02. Deyaar Development edged down 2.12 per cent to Dh0.46, while Union Properties lost 1.47 per cent to Dh0.67.

    Drake & Scull which sold shares last year, ended down 26 per cent to Dh0.74, below its offer price of Dh1.0 on its first trading day. “The poor showing of Drake & Scull merely reflected the sentiment of the market; clearly risk appetite is zero,” said Samer Al Jaouni, general manager at Middle East Financial Brokerage, adding that “the uncertainty out there will make it difficult for companies to go public in the next three quarters.”

    Takaful House, a leading provider of Takaful insurance based in the UAE, was the last company listed on DFM in August 2008.

    Mashreqbank PSC slipped 5 per cent to Dh174.60. The bank said it plans to convert federal government deposits into Tier-2 capital. Tier-2 capital is a banks’ secondary capital and includes items such as undisclosed reserves, general loss reserves and subordinated debt. It protects depositors after the value of Tier-1 capital, that includes items such as common stock, retained earnings and perpetual preferred stock — has eroded. In Abu Dhabi, construction-related stocks led declines with Arkan Building Materials Co. losing 6.88 per cent to Dh3.40. Ras Al Khaimah Cement Co. shed 4.72 per cent to Dh1.20 while Union Cement Co. gave up 5.21 per cent to Dh.2.11.

    --Khaleej Times

    Wednesday, March 11, 2009

    Bahrain's Takaful sector to witness steady growth

    Nexus, the region's leading financial adviser, and Solidarity Family Takaful, launched a joint marketing agreement for Takaful product in Bahrain, designed to provide clients with a Sharia-compliant opportunity to protect wealth for the future.

    Demand for Takaful products - products which are compliant with key Islamic tenets and based on the concept of shared responsibility - in the Middle East has increased sharply in recent months, with clients appreciating the benefits of the transparency and security of such products, as well as their adherence to Islamic ethical expectations.

    In 2008, the global Takaful market was estimated at $2.3 billion, with the Middle East region accounting for 46 per cent of total sales, according to the Bahrain Insurance Association. International growth of the Takaful market currently stands between15 and 20 per cent per annum.

    Nigel Watson, general manager of Nexus Bahrain, said: "The Takaful market is becoming increasingly sophisticated in response to customer demand, providing an equivalent level of return to conventional financial products, as well as a high level of transparency and flexibility."

    Gopi Rao, general manager of Solidarity Family, said "We are seeing an increased demand for customised Takaful products in Bahrain. As part of our commitment to offering flexible products, we are working with regional insurance experts such as Nexus to further develop advanced products suitable to client requirements in Bahrain."


    Non-motor segment helps industry record growth

    KUCHING: The strong performance of the non-motor sector has helped the country’s general insurance industry to record a 3.2% growth in gross direct premium to RM10.5bil last year.

    The medical and health, and liabilities classes grew by 16.7% and 10.5% last year as compared with 2007, said Bank Negara insurance and takaful supervision department director Yap Lai Kuen. She said the personal accident class posted a 9.2% growth during the same period.

    “Even though 2008 has been challenging, the insurance industry has maintained an overall high volume of business,” she said when opening the inaugural Sarawak insurance agency seminar yesterday.

    However, Yap said the life insurance’s new business annual premium equivalent registered RM7.2bil last year, down from RM7.6bil in 2007. She said this was due largely to a decline in sales of investment-linked business.

    “It is worthwhile to note that ordinary life recorded a strong growth of 18.6%, thus demonstrating the industry’s ability to adapt to a changing business environment,” she added.

    Yap said Bank Negara had recently issued a concept paper - “Guidelines on the introduction of new products for insurance companies and takaful operators” - in which fair treatment of consumers was highlighted.

    She said the paper stressed the need for insurance companies to put in place policies and procedures to ensure that customers were fully informed through appropriate disclosures of the key features, terms and conditions and risks associated with the product. The product must also be appropriate for the target group of consumers taking into consideration their broad needs and risk appetite, and compensation arrangements for sales staff and agents must not induce an excessive bias towards high revenue-generating products that they are likely to result in unsuitable product advise or sales to customers.

    Yap said insurance companies must be seen to be actively involved in combating fraudulant practices and money laundering to boost their integrity and trustworthiness.

    She said insurance agents had to keep up-to-date in terms of technical competency, maintain a high standard of ethical behaviour and provide customer-orientated services.

    --The Star

    Saturday, March 7, 2009

    Azhar A. Jaffri appointed as Director of Takaful

    Karachi—Chairman & Chief Executive Officer/Managing Director House Building Finance Corporation is appointed as Director to the Board of Takafu! Pakistan Ltd. Takaful Pakistan

    Limited was incorporated in June, 2006 with an authorized capital of Rs. 300 mi11ion, all fully paid-up. The Company is sponsored by reputable financial institutions both local and foreign, duly managed by a team of qualified and experienced professionals and supervised by a distinguished Shariah Advisory Board of international repute; House Building Finance Corporation Limited is one of the main sponsors of Takaful Pakistan Limited. The company has the capacity to underwrite risks in all avenues of General Insurance namely, Property (Fire & Engineering), Marine, Motor, Liabilities, bonds & guarantees etc.

    In addition, the Company has the expertise and arrangements with overseas Takaful operators enabling it to offer comprehensive coverage for large infra-structure projects, specialized risks and umbrella/blanket covers specifically tailored for Islamic banking operations as well as for large corporate groups. The Company currently operates with a network of branches in seven major cities in the country.

    Pakistan Observer

    A World First For Syariah-Compliant Retakaful Wording

    Bandar Seri Begawan - The world's first fully Syariah compliant retakaful wording agreement was signed yesterday, marking another milestone in the Islamic insurance industry in Brunei Darussalam, state broadcaster Radio Televisyen Brunei (RTB) reported yesterday.

    The agreement was made between Takaful IBB Berhad and Labuan Re (L) Ltd. As the chairman of Takaful IBB Berhad, Ministry of Communications Pehin Oratg Kaya Seri Kerna Dato Seri SdiiZ Hj Abu Bakar Hj Apong was present to witness the signing. Signing on behalf of Takaful IBB Berhad was its acting managing director, Hjh Lily Hj Kula while CEO Dato Hj Majid Mohamad represented Labuan Re (L) Ltd.

    A representative from Takaful IBB Berhad says the financial institute is among the world's first takaful operators to adopt the takaful wording in its retakaful treaty programmes for 2008 to 2009. The retakaful wording is based on the concept of waqadah and tabarruk, where Takaful IBB Berhad

    as a takaful participant, has agreed to allow Labuan Re (L) Ltd to handle its takaful funds in the most applicable way.

    The contents of the retakaful wording clearly define the treatment of the retakaful fund, providing the guidelines and claims payment, the mechanisms of the fee generated and the formulation of the distribution of the net retakaful surplus to the retakaful participants, in corn- pliance with Syariah requirements.

    "This is a move towards the right direction to make sure all products as well as services in retakaful are fully syariahcompliant," Dato Hj Majid was quoted as saying. "This is one of the ways where Labuan Re is contributing to the spread and progress of takaful, not only in Brunei, not only in Southeast Asia, but also in the world." According to the report, takaful contributions currently stand at US$7 billion as opposed to US$2 billion in 2006.

    -- Courtesy of The Brunei Times

    BNM Appoints Bakarudin, Sukhdave As Assistant Governors

    Bank Negara Malaysia (BNM) has appointed Bakarudin Ishak and Dr Sukhdave Singh as assistant governors effective March 5, 2009.

    In a statement here today, BNM said Bakarudin has served the bank since 1985 and has held several senior positions.

    Bakarudin has served as director of Foreign Exchange Administration Department, director of the Islamic Banking and Takaful Department and was appointed chief executive officer of Malaysian Electronic Clearing Corp Sdn Bhd on Dec 1, 2008.

    BNM said as director of Islamic Banking and Takaful Department, Bakarudin had an important role in the bank's efforts in the development of Islamic finance and in promoting Malaysia as an Islamic financial hub.

    It said Sukhdave joined the bank in 1986 and has a doctorate in in monetary and international economics from Vanderbilt University, US.

    During his service with the bank, Sukhdave has served in the Economics Department, headed monetary policy research, and in 2005, became director of the Monetary Assessment and Strategy Department.

    Sukhdave has also represented the bank at regional and international macroeconomic and monetary policy fora and has chaired Asean taskforces on regional exchange rate and currency cooperation.

    -- BERNAMA

    Thursday, March 5, 2009

    AmResearch positive on RHB Bank, AIA tie-up

    AMRESEARCH views RHB Bank’s bancassurance tie-up with American International Assurance Bhd (AIA) positively although there are no details on it as yet.

    It said the tie-up would enable RHB Bank to add a new source of non-interest income and leverage on AIA’s expertise and experience. It would also mean that RHB Bank would not have to tie up additional capital for the generally capital intensive life insurance business. “This strategic alliance with AIA is the second that RHB Bank has unveiled in recent times, the first one being the set-up of the first banking kiosk in Tesco Hypermarket and the launch of Tesco co-brand debit and credit cards. This forms part of management’s strategy to enhance the bank’s distribution capabilities through partnership,” AmResearch noted.

    On Monday, RHB Capital Bhd — the holding company of RHB Bank — announced that the bank had executed a term sheet with AIA, which constitutes the preliminary statement of intentions of AIA and RHB Bank to establish a 10-year mutually exclusive bancassurance relationship in Malaysia.

    Under the proposed terms of the bancassurance alliance, RHB Bank is to market, promote and sell conventional life insurance products developed by AIA via the bank’s network of offices, branches and other channels. AIA would absorb all the cost and expenses necessary for the successful implementation of the plan.

    In addition, AIA shall commit upfront RM50 million in consideration for RHB Bank’s commitment to the 10-year exclusive bancassurance relationship.

    “Both parties have also agreed to review the offering of takaful products. In the event AIA notifies RHB Bank that it is unable to add takaful products to the bancassurance product range, AIA will pay a sum of RM50 million to RHB Bank to enable RHB Bank to source for takaful products from another insurer,” said AmResearch.

    “This RHB Bank-AIA alliance is similar to the Public Bank-ING 10-year partnership that was cemented in November 2007. But the goodwill payment that Public Bank received from ING was a more substantial RM200 million with another €12.4 million (RM58.1 million) to be paid over the duration of the agreement upon fulfilment of the conditions set out in their agreement.

    “The bigger goodwill payment under the Public Bank-ING tie-up can be attributed to the regional coverage that Public Bank would provide to ING,” added the local research house.

    At RM3.76, AmResearch noted that RHB Capital is trading at one time its FY09F’s price-to-book value (P/BV) and 7.7 times FY09F’s earnings per share (EPS).

    “We have a fair value of RM4.10/share, which values the stock at 1.1 times P/BV and 10.6 times PE (price earnings),” it said, adding that it is maintaining its hold recommendation on the stock.

    RHB Capital slipped eight sen to close at RM3.68 yesterday.

    The Edge

    PruBSN launches recruitment drive

    PETALING JAYA: Prudential BSN Takaful (PruBSN) has launched a recruitment drive to fill up more than 150 positions for its Bancatakaful division.

    In a statement, PruBSN head of bancatakaful Mohd Hanafi Mohd Isa said the company was looking for fresh graduates to join as takaful financial executives (TFEs). He said once trained, the TFEs would be placed in selected Bank Simpanan Nasional (BSN) branches nationwide.

    As part of the initiative to boost its human capital development, PruBSN increased its training budget by 60% from last year. PruBSN is a 51:49 partnership between BSN and Prudential PLC.

    The Star

    Wednesday, March 4, 2009

    New CEO For HSBC Amanah Takaful

    Zainudin Ishak has been appointed the new executive director and chief executive officer of HSBC Amanah Takaful (Malaysia) Sdn Bhd.

    In a statement today, HSBC Bank Malaysia Bhd said, Zainudin had 19 years of hands-on experience in managing a conventional and Islamic insurance company.

    "Before he joined HSBC Amanah Takaful, he was the chief executive officer of another local joint venture Takaful provider.

    "He led the company to deliver business results and pursued initiatives with the joint venture partner in leveraging Takaful expertise in Malaysia," it said.

    Zainudin, 42, started his career in the Broking Division of a local insurance operator in 1989 and from then on, served in various capacities especially in sales and operations as well as the customer services division.

    -- BERNAMA

    Takaful International's profit surges to $1.2m

    MANAMA: Takaful International Company saw significant growth last year in total insurance subscriptions from BD9.186 million to BD14.022m. The participants and the shareholders portfolio reported a net profit of BD449,000 ($1.19m), an increase of 101 per cent.

    The takaful technical reserves increased by 41pc from last year, to reach BD13m, while the company's assets have been reported at BD24m, an increase of 24pc from last year.

    These increases are considered high despite the negative influence of the current credit crunch and financial crisis overall in the market and especially in the insurance sectors.

    "We are moving forward with our successful strategy of expanding on regional and international levels," said chief executive officer Younis Al Sayed.

    "In addition, we are dedicated to enhancing the quality of takaful services as we peruse our plans to enter a number of promising foreign markets in the insurance sector," he said.

    He emphasised the company's commitment to spread the takaful concept by offering special packages of insurance services and developing insurance coverage as well as expanding the company's services to include clients from inside and outside the kingdom and to benefit from the available growth chances in the takaful and re-takaful market.

    "This year we look forward to raising the level of insurance services with high standards for our clients and launching new insurance products that meet the vast needs of individuals and corporations and enhance their cover in terms of compensation and protection," he said.

    The company's financial statements, which have been approved by the board, will be further discussed at the annual general meeting to be held on March 17.

    Takaful International Company is the first takaful company to achieve the 'BBB' rating with a stable outlook from the international credit rating agency Standard & Poor's.

    -- Daily News

    Nexus, Solidarity in Takaful deal

    Nexus, the region’s leading financial adviser, and Solidarity Family Takaful, have joined hands to launch their portfolio of customised Takaful products and savings plans in Bahrain.

    These products have been designed to provide clients with a Shariah-compliant opportunity to protect wealth for the future, said the company officials.

    Demand for Takaful products– products which are compliant with key Islamic tenets and based on the concept of shared responsibility – in the Middle East has increased sharply in recent months, with clients appreciating the benefits of transparency and security of such products, as well as their adherence to Islamic ethical expectations.

    In 2008, the global Takaful market was estimated to be a $2.3 billion, with the Middle East region alone accounting for 46 per cent of total sales, according to the Bahrain Insurance Association.

    International growth of the Takaful market currently stands at between 15 to 20 percent per annum.

    Nigel Watson, general manager of Nexus Bahrain, said: “The Takaful market is becoming increasingly sophisticated in response to customer demand, providing an equivalent level of return to conventional financial products, as well as a high level of transparency and flexibility.”

    The Takaful portfolio will include takaful products such as education, start and retirement plans having protection, saving and investment features, as well as takaful pure term life and other Shariah-compliant protection plans.

    Gopi Rao, general manager of Solidarity Family, said the company was witnessing an increased demand for customised Takaful products in Bahrain.

    "As part of our commitment to offering flexible products, we are working with regional insurance experts such as Nexus to further develop advanced products suitable to client requirements in Bahrain," he explained.

    While Nexus offers a highly comprehensive range of personal and corporate financial products, it is confident that Takaful will emerge as one of its most popular lines over the next 12 months.

    “We believe that demand for this product range will continue to rise over the coming months, particularly as customer awareness increases."

    "We are excited to work with Solidarity Family Takaful, a company with demonstrated brand awareness and strong localised service and marketing support,” Watson added.

    -TradeArabia News Service