5 Interactive Distance Learning Programs on Islamic Banking and Finance

Saturday, August 22, 2009

Takaful IKHLAS Launches Group Scheme For Immigration Staff

Takaful Ikhlas Sdn Bhd has launched a comprehensive group Takaful scheme for the staff of Immigration Department through the latter's Kesatuan Perkhidmatan Imigresen Semenanjung Malaysia (KPISM).Executive Vice President and Chief Operating Officer of Takaful Ikhlas, Wan Mohd Fadzlullah Wan Abdullah said the group scheme has been prepared specially to provide Syariah based comprehensive financial protection."The scheme will provide attractive and reasonable rates into the investment accounts of the participants. Besides the element of saving for retirement days, it is also created to minimise the risk factor," he said in a statement here Friday.Wan Mohd Fadzlullah said Takaful Ikhlas aimed to get 2,000 new members under the scheme with an estimated contribution amount of RM1 million in the first year.The scheme will be also opened to the family members of those taking up the scheme.Among the features of the scheme will include coverage for accidents, death, hospitalisation benefits, as well as coverage for 40 critical illnesses.Further details on the scheme can be obtained at KPISM or from any Takaful Ikhlas office.


Monday, August 17, 2009

Insurers can end sukuk compliance woes, experts say

Islamic insurers can help rid the Islamic bonds market of crippling concerns over the compliance of structures with Islamic law, or sharia, industry experts and executives said.

Global issuance of sukuk fell 56 percent year-on-year to $14.9 billion in 2008, according to Standard & Poor's, as the market was caught up in the global liquidity freeze but also due to a debate on whether the majority of Islamic bonds, or sukuk, were sharia-compliant.

Prominent scholar Sheikh Muhammad Tariq Usmani said in late 2007 that most Islamic bonds were not compliant with sharia as their guarantee to pay out bondholders at maturity contradicts the principle of sharing risk and returns.

Peter Hodgins, a lawyer specialising in Islamic insurance at law firm Clyde & Co said Islamic insurance, or takaful, products could help reconcile the need for sukuk to comply with these requirements and investors' need to insure against risks.

"Takaful can be a solution to help out the sukuk market."

Takaful firms could provide insurance for sukuk investors that takes over notional annual payments to bondholders if they fall below an agreed amount, he said, adding that there were discussions in the industry on such a product.

In Islamic insurance, customers contribute to a pool of funds which is used to indemnify participants who suffer a loss, while in conventional insurance the insurer takes on the risk for a premium.

"As the sukuk market evolves, there could be room for such a product," said Nick Frei, chief executive of Bahrain-based Islamic insurer t'azur.

But he said pricing these products could be a challenge for takaful companies as the risk of sukuk was difficult to assess.

-- Reuters

Insurance deal signed for Eskan Bank staff

Takaful International has signed a contract with Eskan Bank to provide health insurance for the bank's employees and their families for one year.

The contract has been awarded through the Tender Board, which is recognised for its highly-transparent policy in managing tenders.

"Eskan Bank's management is pleased that Takaful International has met all the terms and conditions of the tender," said bank general manager Sabah K Almoayyed

"This agreement is a confirmation of the bank's dedication to care for our professional staff, who are an essential element for the success of any financial institutions, as we are always keen to provide convenience and safety for them."

She said this insurance coverage is an important and a necessary incentive to the bank's staff to improve their morale and overall job satisfaction.

"We are glad to co-operate with Eskan Bank, through providing a comprehensive health insurance coverage for their employees and their families, with no doubt this coverage provides security, comfort and reassurance," said Takaful International chief executive officer Younis Jamal Al Sayed.

"Such coverages are considered an urgent requirement for all institutions to ensure their success and to keep pace with growth in light of the changes in the professional sector."

Mr Al Sayed added that the company continues to develop its insurance services, products and health insurance policies.

It seeks to attract more hospitals and clinics in the Middle East and include them within the network of their own health care providers.

-- Gulf Daily News

SABB Takaful rights issue starts

SABB Takaful announces its rights issue started Saturday, 15 August 2009.
A number of 24m new shares are offered through this rights issue representing a 240% increase in SABB Takaful's shares to 34m. Shares are being offered at SR12.5 per share. The rights issue offering period will continue for ten working days including Wednesday 26 August 2009.

Dr Yazid AbdulRahman Al Ohaly, Chairman of SABB Takaful said:

'This is the first rights issue held in the Kingdom for an insurance company and the proceeds will be used to finance the future plans of the company. We are pleased to announce the start of the subscription period.'

Shareholders voted at the Extraordinary General Meeting, held at The Saudi British Bank headquarters in Riyadh on 8 August 2009 to increase the company's capital through a rights issue.

The offering is open to all SABB Takaful registered shareholders as of the close of trading on 8 August 2009. 12 shares is allocated for every 5 shares held by shareholders on the eligibility date.

During the offering period, eligible shareholders may submit their applications to subscribe for rights issue shares either through a branch of the receiving banks or tele-banking services section or automated teller machines (ATMs) or the internet banking service of any of the receiving banks providing such services.

Receiving banks for the rights issue are The Saudi British Bank (SABB), Al Rajhi Bank, The National Commercial Bank (NCB or otherwise known as Al Ahli Bank), Bank Al Jazira, and Samba Bank.


Wednesday, August 5, 2009

Takaful Ikhlas Appoints Two New Syariah Committee Members

Takaful Ikhlas Sdn Bhd has appointed Associate Professor Dr Shamsiah Mohamad and Dr Muhammad Naim Omar as the company syariah committee members, effective April 1, 2009.

In a statement here today, the company said Shamsiah is currently serving as at the 'Fiqh' and 'Usul' Islamic Academic Studies Department of University Malaya while Muhammad Naim is an Assistant Professor of law studies at the International Islamic University (IIU).

The Takaful Ikhlas Syariah Committee's role is to assist the board and top management to provide counsel and guidance in ensuring the company operates and manages its business in accordance with Syariah principles.


Methaq Takaful changes board of directors

Ali bin Za’al Al Mansouri replaced Dr Abdul Latif Al Shamsi as the chairman of Methaq Takaful Insurance Company, after the latter resigned recently.

Samer Mohammed Kanan was also elected as the managing director, and he will manage the company’s administrative staff.

“The change in the board of directors aims at developing the company and supporting its continuous progress and expansion plans,” said Samer Kanan.

Methaq Takaful Insurance Company is a registered and licensed General Takaful company in the UAE, with a capital of Dh150 million ($40.8 million).

The company offers individuals and corporations a complete range of high quality, flexible, integrated, Shariah-compliant insurance products and services.

Established on March 11, 2008, Methaq Takaful Company was listed on Abu Dhabi Securities Exchange on May 11, 2008 and its activities are clearly segregated between Takaful Fund, which belongs to its policyholders, and Methaq Takaful Operation, which belongs to the shareholders and from which all claims are reimbursed.

--TradeArabia News Service

Wednesday, July 29, 2009

Islamic business insurance from Salaam Halal

Muslim CEOs running UK-based companies will soon be able to opt for takaful risk management solutions from stand-alone Islamic insurer, Salaam Halal.

According to a report by Reuters, the move represents a branching out by Salaam Halal, which has so far focused on providing takaful motor and home insurance.

Takaful, a form of insurance legal under Islamic law, adheres to strict guidelines on investments.

Insurance funds cannot be invested in alcohol or gambling and there is clear segregation between assets owned by members and those owned by the insurer.

The new business will target Muslim-owned small and medium sized businesses with less than £1m annual turnover, including lawyers, doctors, retailers, and accountants.

“It was always our intention to look at these markets,” said Salaam Halal CEO Bradley Brandon-Cross.

“We will be very much focusing on this project in 2010,” he added.

There are an estimated 140,000 Muslim-owned SMEs in the UK.

--Insurance Daily

IGI Investment Bank, Pak-Qatar sign MoU

IGI Investment Bank, a part of the IGI Financial Services, recently signed a bancatakaful agreement with Pak-Qatar Family Takaful aiming to further strengthen its portfolio by adding Family (Life) Takaful Insurance to its insurance advisory services. Under this agreement, clients will be able to secure their own and their family’s future the Islamic way through a host of Shariah compliant Takafu—Islamic insurance—products offered to the bank. IGI Investment Bank will, therefore, be able to cater to all those clients who are seeking a Halal alternative to conventional insurance

--Daily Times

UK's only Islamic insurer targets entrepreneurs

* Eyes Muslim-owned SMEs with less than 1 mln stg turnover

* Mulls life insurance partnership, Europe expansion

LONDON, July 24 (Reuters) - Salaam Halal, the UK's only stand-alone Islamic insurer, will expand next year to offer insurance -- or takaful -- to companies run by Muslim businesses, the company's CEO said on Friday.

Bradley Brandon-Cross told Reuters the company, which launched in 2008, wants to launch the first takaful product range for Muslim-owned small and medium-sized business in Britain, which he estimated number around 140,000.

Major European insurers have been considering a move into the European takaful market, seeking to tap demand from the millions of Muslims on the continent [ID:nLE729394], but the market is still in its infancy and growth is hard to predict.

Salaam Halal -- which has so far focused on car and home insurance -- will particularly target businessmen with less than 1 million pounds ($1.65 million) annual turnover, typically lawyers, accountants, doctors and retailers.

"It was always our intention to look at these markets. We will be very much focusing on this project in 2010," Brandon-Cross said.

Takaful works like mutual-insurance but there is a clear segregation of the assets owned by members and those owned by the insurer. Members contribute to a common pool to fund claims and members benefit if the pool is left in surplus.

Investments made using the pool of funds adhere to sharia law and shun sectors such as alcohol and gambling.

Ernst & Young has estimated the global takaful contributions will reach $7.7 billion in 2012, double the volume in 2007, at the conservative end of estimates.

Salaam Halal is considering offering life savings products in partnership with other insurers in the UK and outside the UK, which Brandon-Cross declined to name. The company may also move into European countries with large Muslim populations, such as France, Germany and the Netherlands.

--Thomson Reuters

Takaful Ikhlas Appoints Two New Syariah Committee Members

Takaful Ikhlas Sdn Bhd has appointed Associate Professor Dr Shamsiah Mohamad and Dr Muhammad Naim Omar as the company syariah committee members, effective April 1, 2009.

In a statement here today, the company said Shamsiah is currently serving as at the 'Fiqh' and 'Usul' Islamic Academic Studies Department of University Malaya while Muhammad Naim is an Assistant Professor of law studies at the International Islamic University (IIU).

The Takaful Ikhlas Syariah Committee's role is to assist the board and top management to provide counsel and guidance in ensuring the company operates and manages its business in accordance with Syariah principles.


Saturday, July 18, 2009

Takaful Malaysia confident of outperforming sector's growth target

SYARIKAT Takaful Malaysia Bhd (STMB), the pioneer Islamic insurer in Malaysia, expects to outperform the industry's 25 per cent growth target for 2009, says group managing director Datuk Hassan Kamil.

Recovery in the general and family insurance portfolio and improved equity market in the past four months has improved the company's outlook, he said.

STMB has added professional financial advisers to its distribution channels and hopes to expand its customer base to include the middle-upper Malaysian market.

"We want to elevate the company to the next level, targeting more cash from the demand of customers in this income bracket (with higher contributions or premium size)," Hassan said, after the signing ceremony between STMB and Standard Financial Planner (SFP) in Kuala Lumpur yesterday SFP will market STMB's products through its network of more than 300 representatives, who include Bank Negara Malaysia-licensed financial advisers.

The tie-up would improve the company's bottom line by 10 per cent, he added.

For the third quarter ended March 31 2009, the insurer posted a pre-tax loss of RM11.46 million down from a pre-tax profit of RM11.07 million in the same quarter last year.

Revenue also declined to RM187.67 million from RM280.67 million previously.

Hassan also said that STMB is on track to regain its number one position in the market in two years, when it secures more than 50 per cent of RM11 billion assets in the industry, from its current RM4 billion or 40 per cent.

--Business Times

STMB teams up with Standard Financial Planner

Syarikat Takaful Malaysia Bhd (STMB) has entered into a distribution agreement with Standard Financial Planner Sdn Bhd (SFP) to enhance the penetration rate of STMB’s family and general products into the middle-upper Malaysian market.

The agreement signed yesterday makes STMB the first takaful player to add professional financial advisers to its existing portfolio of distribution channels.

SFP is to market STMB products through its nationwide network of more than 300 representatives, of whom 75 are licensed financial advisers.

STMB group managing director Datuk Mohamad Hassan Kamil said SFP’s financial advisers would play an instrumental role in reaching out to potential customers in the middle-upper income bracket.

“STMB will also work closely with the financial advisers to offer comprehensive insurance, investment and saving options to satisfy the holistic demand of these customers,” he said in a statement yesterday.

The engagement of SFP is part of STMB’s strategy to gain more customers with higher contributions or premium size.

SFP is the market leader and the largest independent financial advisory group in Malaysia.

--The Star online

Friday, July 17, 2009

Takaful Malaysia Eyes Over 50 Per Cent Mart Share

Syarikat Takaful Malaysia Bhd aims to capture more than half of the takaful industry's total asset market share within the next two years amid the current economic slowdown.

Group managing director, Datuk Mohamad Hassan Kamil, said the industry's total assets amounted to between RM11 billion and RM12 billion while the company's share currently was RM4.05 billion.

"We will grow slightly above the current takaful market rate, which is between 20 and 25 percent per annum," he told a media briefing after signing an agreement with Standard Financial Planner Sdn Bhd (SFP) here Wednesday.

SFP, which was set up in 1999, is one of only ten licensed financial advisors in Malaysia.

It is a member of the Australian-based Professional Investment Group of Companies that operates across seven countries.

Hassan said under the agreement, SFP would market Takaful Malaysia's products through its nationwide network of more than 300 representatives, of which 75 percent were licensed financial advisors with Bank Negara Malaysia.

He said the addition of SFP to its existing portfolio of distribution channels would boost the company's revenue by 10 percent.

"This will enhance the penetration rate of our family and general products into the middle-upper Malaysian market as well as making them more accessible wider customer base.

"We will work closely with SFP's financial advisors to offer comprehensive insurance, investment and saving options to satisfy the holistic demand from customers," he said.

Takaful Malaysia posted a pre-tax loss of RM11.461 million for the third quarter ended March 31, 2009 compared to a pre-tax profit of RM11.07 million in the same quarter last year.

Revenue declined to RM187.667 million from RM280.678 million previously.

Hassan said Takaful Malaysia planned to undertake a rebranding exercise to reflect its fresh characteristics in conjunction with its 25th year anniversary in December.


Etiqa bags Best Banca Takaful award

ETIQA Takaful Bhd has won the Best Banca Takaful award at the International Takaful Award 2009 held in conjunction with the Third International Takaful Summit 2009 in London recently.

Etiqa Takaful was the only Malaysian takaful company to win in the global 17-category event, it said in a statement.

Etiqa Takaful was hailed for its performance despite the economic environment and innovative yet simple products in Banca Takaful.

“Etiqa Takaful’s growth in the banca takaful business does indeed exhibit its capabilities to provide appropriate financial solutions together with its Banca partners” said Mohamed Abdullah, director of the Middle East Business Forum.

--Business Times

Insurance Stands Tall

These are testing times for any financial institution. But if there is a Middle Eastern industry relatively well-placed to weather the pressures of the international downturn, it may be insurance, writes Paul Melly...

Having been a relatively slow developer in the past - by comparison with the region's dynamic banking scene - the insurance business is probably less exposed to the pressures of the credit crunch. And in extending its reach among consumers, it may have room for expansion even at a time of cutbacks elsewhere in the economy. Indeed, the recent underlying trend has been strikingly vigorous.

In 2007, the industry grew by 27 per cent in the UAE and, before the credit crunch, analysts were suggesting that, across the region as a whole, future growth rates could be in the 18-20 per cent range before long. The Saudi insurance sector was already worth SR7 billion ($1.87 billion) and analysts suggested it could double or even triple in size within a relatively short timescale.

While the most bullish growth projections may have to be revised downwards, in light of global economic trends and the softening of the oil price in 2008, the overall pattern appears to be solidly established: the gradually extending reach of an industry that has yet to get to many of the potential personal or small business customers that the Middle Eastern market offers.

Moreover, it already has a solid base on which to build in key economies. In the UAE, for example, expatriates must now be able to show evidence of health insurance cover before they can secure a visa for work or even a visit. To cater for their needs, 30 different health underwriters are now active in Abu Dhabi alone.

Greater take-up
In Saudi Arabia, the authorities have been phasing in a mandatory requirement for the use of nine types of insurance, including employer liability, health and motor cover. That represents a major regulatory change for a country where only 10 per cent of cars used to be insured.

The Saudi industry used to be dominated by the parastatal National Company for Co-operative Insurance; competition was limited and was largely provided by foreign companies represented by agents. Tougher regulatory requirements for the use of insurance have been coupled with the liberalisation of the market, under a 2003 sector framework law, to allow room for a wider range of providers. Banks in the Kingdom have already started to respond by buying stakes in new local underwriters, while foreign players are now able to get directly involved, through joint ventures with local partners.

A significant feature of the reform is that it allows companies to offer both conventional insurance and the Islamic equivalent, 'takaful' - although they have to be able to account for both lines of business separately, so that auditors can clearly see that the Islamic services have been provided on the basis of sharia-compliant financing and security. But this is a small price to pay for insurers keen to move into what is a particularly dynamic segment of the industry across the Middle East. Because so many potential consumers are Muslims, takaful has huge scope for growth - emulating the expansion already enjoyed by Islamic banking.

By early 2008, the Saudi regulators had licensed a score of new takaful companies. In Egypt, the pioneering provider of takaful, Egyptian Saudi Insurance House, founded in 2002, saw its premium income quintuple
over the first five years of its operation.

Other investors - Egypt Kuwait Holding (EKH) in partnership with Tokio Marine & Nichido Fire Insurance, Bahrain's Ithmaar/Solidarity Group and a UAE consortium of Amlak, Arab Orient Insurance Company and Abu Dhabi Islamic Bank - are also moving into the Egyptian takaful business.

Fewer than 1 per cent of Egyptians use insurance at present. But the provision of sharia-compliant products is seen as a major tool for overcoming consumer resistance. "EKH sees great opportunities for profitable growth in Egypt, where insurance products have not yet reached the levels of acceptance that could be expected. The offering of the takaful scheme will remove one of the important barriers to the acceptance of insurance products by a large segment of the market," explained the chairman, Nasser al-Kharafi.

Growing volumes
The sheer size and untapped potential of the Saudi and Egyptian markets is a particularly strong attraction for investors seeking to develop new takaful activity, because they can hope to spread the costs of developing business models to comply with local requirements across a large volume of activity. But even in smaller markets, there are signs that takaful - and retakaful (Islamic reinsurance) - is on an upward trend.

February 2008 saw the launch of Al Fajer Retakaful, Kuwait's first such entity, but the third to be established in the Gulf, with Dubai Group holding a 51 per cent stake. With paid-up capital of $178.5 million, and building on Kuwait's strong base in Islamic finance, it aims to be the largest retakaful company in the world. "Given the clearly evident growth in the takaful industry, there are excellent opportunities ahead for a new, strongly capitalised retakaful company," explained Sameer al-Gharaballi, vice-chairman and managing director.

--Global Arab Network

Wednesday, July 8, 2009

Meezan Bank and Takaful Pakistan sign agreement

Meezan Bank and Takaful Pakistan have entered into an agreement whereby all customers of Meezan Bank’s Labbaik (Hajj and Umrah) deposit product will be provided Shariah-compliant credit Takaful coverage.

President Meezan Bank Irfan Siddiqui and Takaful Pakistan CEO Capt Jamil Akhtar signed the agreement.

Under the agreement, all Labbaik installment customers that have performed Hajj or Umrah will be provided credit Takaful coverage at very special rates. In case of natural death, accidental death, permanent total disability or insolvency of a Labbaik customer his/her outstanding installments will be paid by Takaful Pakistan.

Speaking on the occasion, Siddiqui said that Meezan Bank had always focused on coming up with Riba-free products and innovative facilities for its customers and the arrangement with Takaful Pakistan was another step in the direction of making Islamic banking the banking of first choice. Jamil said that he was delighted to sign the Takaful agreement with the country’s leading Islamic bank.

--Daily Times

Takaful Malaysia Eyes Over 50 Per Cent Mart Share

Syarikat Takaful Malaysia Bhd aims to capture more than half of the takaful industry's total asset market share within the next two years amid the current economic slowdown.

Group managing director, Datuk Mohamad Hassan Kamil, said the industry's total assets amounted to between RM11 billion and RM12 billion while the company's share currently was RM4.05 billion.

"We will grow slightly above the current takaful market rate, which is between 20 and 25 percent per annum," he told a media briefing after signing an agreement with Standard Financial Planner Sdn Bhd (SFP) here Wednesday.

SFP, which was set up in 1999, is one of only ten licensed financial advisors in Malaysia.

It is a member of the Australian-based Professional Investment Group of Companies that operates across seven countries.

Hassan said under the agreement, SFP would market Takaful Malaysia's products through its nationwide network of more than 300 representatives, of which 75 percent were licensed financial advisors with Bank Negara Malaysia.

He said the addition of SFP to its existing portfolio of distribution channels would boost the company's revenue by 10 percent.

"This will enhance the penetration rate of our family and general products into the middle-upper Malaysian market as well as making them more accessible wider customer base.

"We will work closely with SFP's financial advisors to offer comprehensive insurance, investment and saving options to satisfy the holistic demand from customers," he said.

Takaful Malaysia posted a pre-tax loss of RM11.461 million for the third quarter ended March 31, 2009 compared to a pre-tax profit of RM11.07 million in the same quarter last year.

Revenue declined to RM187.667 million from RM280.678 million previously.

Hassan said Takaful Malaysia planned to undertake a rebranding exercise to reflect its fresh characteristics in conjunction with its 25th year anniversary in December.


T'azur launches Takaful products

T’azur Company, a regional Takaful firm based in Bahrain, today announced the launch of its extensive range of family and general Takaful products.

Addressing a press conference in Bahrain, Sheikh Dr Abdul Aziz Bin Naif Al Orayer, t'azur chairman, said: “The team has created an unparalleled range of Takaful products. Be it for your possessions, your family or your business - t’azur has a high quality and good value Takaful solution. t’azur is now open for business.”

Created by Unicorn Investment Bank, t’azur was established in November 2007 with an authorised capital of $500 million to capitalise on untapped opportunities and immense growth potential across the international insurance sector.

The company will initially offer 20 products – eight in Family Takaful and 12 in General Takaful categories.

T’azur’s products cover all aspects of people’s lives, possessions and well-being. The Family Takaful range of products includes advanced savings plans combined with life insurance, enabling families to plan for their future regardless of unforeseen circumstances.

The General Takaful products address not only the insurance needs of individuals (e.g., motor or home insurance), but also the needs of the business community of Bahrain, through its broad range of Shari’a compliant corporate products.

Sheikh Dr Abdul Aziz said the company has been late to enter the market and hence was able to avoid some of the repercussions of the financial crisis. “We have been able to learn from the mistakes of others,” he said.

The region is a fast growing and dynamic insurance market and we are entering it at the right time with the right products, he said.

“We are a regional company and plan to launch our products in Saudi Arabia, Kuwait and Qatar shortly.”

Nikolaus Frei, t’azur CEO, added: “Insurance in general and our Takaful products in particular, ultimately benefit the whole community.”

Bahrain is a largely untapped insurance market and provides a great opportunity for Takaful products. While the insurance market as a whole saw a 34 per cent growth in the kingdom last year, the Takaful market grew a massive 300 per cent growth, he said.

The challenge for Takaful firms is to create awareness and attract the vast majority of uninsured people to benefit from the products on offer, he said.

T’azur’s range of Family and General Takaful products are available either directly from t’azur, or through all leading insurance intermediaries in Bahrain.

--TradeArabia News Service

CreditWatch Negative - Kuwait-Based Wethaq Takaful Insurance Ratings Lowered

Standard & Poor's Ratings Services said today that it has lowered its counterparty credit and insurer financial strength ratings on Wethaq Takaful Insurance Co. K.S.C. (Closed) to 'BB+' from 'BBB-'.

The ratings remain on CreditWatch with negative implications, where they were placed on May 27, 2009.

"The downgrade reflects our increasing concerns regarding the impact on Wethaq's financial strength of the situation at TID," said Standard & Poor's credit analyst Lotfi Elbarhdadi.

TID (The Investment Dar; not rated) has a 67% shareholding in Wethaq.

The negative CreditWatch status means that we may further lower the ratings, depending on the development of TID's financial situation. The ratings were originally placed on CreditWatch negative on May 27, 2009, following an announced default by TID on one of its sukuk issues.

Among the key features underlying our opinion on Wethaq's financial strength ratings, as a Takaful (Islamic insurance) player in Kuwait, was an implicit benefit of being part of a large Sharia-compliant shareholder.

We expect to resolve the CreditWatch status or update it within three months.

"The resolution timing will depend upon the outcome of TID's debt restructuring, and on obtaining more clarity on its financial situation and strategic positioning," said Mr. Elbarhdadi.

We will then focus on evaluating the impact of TID's ownership on Wethaq's financial flexibility (defined as its level of access to capital relative to its needs), competitive position, and investments. If the outcome of the review is negative, we may lower the ratings, but we expect the ratings to remain in the 'BB' category.

--Global Arab Network

Saturday, July 4, 2009

Investors keep eye on corporate results

Saudi shares were volatile last week as the financial sector was negatively affected by hardships facing certain Saudi family businesses, mainly Saad Group and Ahmad Hamad Al-Gosaibi & Brothers Co. (AHAB).

The Tadawul All-Share Index (TASI) shed 0.2 percent last week, closing at 5,599.38 points. TASI is currently 16.6 percent higher than the year’s start, according to the Riyadh-based Bakheet Investment Group’s (BIG) weekly report.

The report expected the Saudi exchange to respond to the quarterly results of listed firms, particularly banks and the Saudi Arabian Basic Industries Corp. (SABIC). SABIC shares dropped 5.30 percent last week to SR62.50.

Some insurance companies made solid gains last week. SABB Takaful shares jumped by 41.03 percent to SR110, Saudi Fransi Cooperative Insurance Co. by 30.04 percent to SR88.75, Alahli Takaful Co. by 24.32 percent to SR181.50 and Saudi Arabian Cooperative Insurance Co. by 12.99 percent to SR65.25.

The Saudi stock market turnover fell last week to nearly SR24 billion compared to SR30.9 billion in the previous week.

Shares in National Agriculture Marketing Co. plunged 13.64 percent to SR38 last week.

Uncertainty prevailed in most Arab stock markets last week as investors awaited the release of second quarter corporate results, which they believed would decide the course of regional markets in the coming stage, financial analysts said yesterday. “We think Arab markets will continue to be without direction in the coming few weeks as investors monitor the publication of balance sheets of listed firms to decide their positions for the coming stage,” an Amman-based portfolio manager said.

“I believe regional markets will also be affected by the movement of oil prices and the indicators released about the performance of the world’s recession-hit major economies that are supposed to provide clues for a way out of the current chaos,” he said.

The Amman Stock Exchange (ASE) was also the scene of violent fluctuations last week due to what analysts described as waves of speculation and varying levels of liquidity that played havoc with prices.

The all-share price index gained 0.95 percent last week, closing at 2,742 points, led by the mining sector and the Arab Bank, the ASE weekly report said.

Blue chip shares recovered in the last two days of the week after the Arab Bank management assured its shareholders that its financial position was unaffected by the hundreds of millions of dollars it had extended as long-term loans to two troubled Saudi business groups.

Kuwait’s KSE all-share index fell 0.4 percent closing week at 8,108 points, against speculation that Kuwaiti stocks were set to rebound after the Interior Minister Sheikh Jaber Khalid Al-Sabah survived a parliamentary no-confidence vote.

The performance of the United Arab Emirates stock exchanges of Dubai and Abu Dhabi was mixed. Dubai’s all-share price index lost 2 percent last week closing at 1,821 points, while Abu Dhabi’s benchmark price gained 1.6 percent to close at 2,671 points.

The Dubai bourse was negatively affected by reports that UAE banks extended loans amounting to $3 billion to troubled Saad and Al-Gosaibi groups.

Egyptian shares behaved differently from other Arab stocks due to strong gains scored by blue chips, analysts said.

Egypt’s AGX30 index, measuring the performance of the market’s 30 most active stocks, climbed 8.9 percent last week closing at 5,965 points.

The GulfBase GCC Index increased slightly to 3,642.45 points last week. The value of GCC traded shares fell by 24.73 percent to $9.68 billion and volume declined by 17.13 percent to 6.15 billion of shares.


Standard & Poor's Voted Best Takaful Ratings Agency

For the second consecutive year, Standard & Poor's Ratings Services today announced that it has been voted "Best Takaful Ratings Company" at the International Takaful Awards 2009. The accolade, presented during an awards ceremony at The 3rd International Takaful Summit 2009 in London, acknowledges our commitment to supporting the development of the Islamic insurance industry.

We published our first Takaful rating in 1997 and we remain the leading rating agency for Islamic insurers, with eight ratings on Takaful and Retakaful firms across Africa, the Middle East, and Asia--more than any other global agency. During 2008, we published updated guidance on our approach to rating Islamic insurers and assigned new ratings to Bahraini-based composite insurer Takaful International Co. BSC, Kuwait-based insurerWethaq Takaful Insurance Co. and Dubai-based Insurer Dubai Islamic Insurance & Reinsurance (Aman).

"We are thrilled to be recognized by the Islamic finance community for our continuing support of the Shariah-compliant risk-management industry, which is driving increased acceptance and understanding of the Takaful business model," said Yann Le Pallec, managing director of Standard & Poor's. "We continue to experience strong demand for new ratings from both Islamic and traditional insurers worldwide."

"Having grown from a niche product servicing limited demand, Islamic insurance has reached a critical mass in the past five years and is now firmly established within the global risk management markets," said Kevin Willis, credit analyst at Standard & Poor's. "The potential for growth is immense, with many consumers switching from conventional insurance or entering the Takaful market for the first time."

The International Takaful Awards 2009 are an initiative of the Middle East Business Forum and Afkar Consulting. Winners were selected from a pool of nominees by a panel of Shariah judges, lawyers, journalists, and practitioners from leading Islamic insurance firms worldwide.


Takaful IKHLAS Helps Noridawati Buy Prosthetic Leg

Takaful IKHLAS Sdn Bhd, provider of products and services in syariah-based financial protection, has contributed RM15,000 to help Noridawati Husin buy a prosthetic leg.

In a statement here Friday, its executive vice president/chief operating officer, Wan Mohd Fadzlullah Wan Abdullah, said the contribution was part of the company's corporate social responsibility.

"We hope that with this contribution, it will help change the life of Noridawati's family.

"The prosthetic leg will help ease Noridawati's burden who needs help in her movements as she has to take care of her children who are still small and to earn a living," he said.

Takaful IKHLAS, which started operations in July 2003, is a subsidiary of MNRB Holdings Bhd.

MNRB is listed on main board of Bursa Malaysia and its major shareholder is Permodalan Nasional Bhd.


Allianz Takaful to launch Islamic pensions in 2010

Allianz will launch its first Islamic annuity product next year, the head of its Takaful unit said, tapping into a growing number of clients in the Middle East keen to add to their state pensions.

It has long been hard for takaful -- or sharia-compliant -- insurers to sell such products, because of the lack of long-term Islamic bonds with which to match pension liabilities, Abdul Rahman Tolefat told Reuters on Wednesday.

The German insurer's unit had lobbied banks to issue long term debt and unnamed banks had now issued 25-year to 30-year sukuk, Tolefat said at a conference.

"This is really a promising industry, especially in the GCC (Gulf Cooperation Council) -- people are looking for private pensions because state pension are not high enough," he told Reuters on the sidelines of the conference.

Allianz was one of the first Western insurance companies to venture into takaful, in which members contribute to a pool of funds which is used to indemnify participants who suffer a loss, much in the same way as with a mutual insurer.

Allianz Takaful already has a pension product which pays out over a pre-agreed number of years, but annuities that guarantee income until death are still an untapped market.

Allianz Takaful is also lobbying for more access to short- to medium term debt and is asking the Bahraini Central Bank to earmark part of any sukuk issuance to takaful companies, who don't have the clout to compete with large banks.

Earlier this year, the Bahraini Government issued a $750 million sukuk and said last month it will issue a further $530 million of sukuk in local currency.

Takaful companies could still buy these sovereign sukuk on the secondary market but they tend to be too expensive, he told the conference delegates.

Among its projects, Allianz is also pursuing a partnership by the end of the third quarter with a network of distributors. Tolefat declined to say who they are.


Wednesday, July 1, 2009

Badr Al Islami announces first Takaful Savings & Investment Programme

Badr Al Islami has announced the launch of Badr Takaful Savings & Investment Programme, the sharia'h compliant savings and protection scheme, available for the first time to Badr Al Islami and Mashreq.

The new scheme addresses the financial needs of customers looking for sharia'h compliant long term savings or investment plans, such as child education fees planning and retirement planning, with takaful benefits. Customers have the choice to build up their savings by either contributing on a regular basis or as a lumpsum amount, which then gets invested into some of the world's best performing Sharia'h compliant funds.

The programme also provides Takaful benefits, ensuring that savings and investments goals are achieved, even in the event of loss of life of the customer. Customers can choose to protect 60% or 100% of their intention. The product is completely Sharia'h compliant and is approved by the Shariah Board, headed by Sheikh Abdalla Ben Suliman Al-Manei, Chairman of the Shariah Board of Badr Al Islami.

Mubashar Khokhar, CEO of Badr Al Islami said: "Badr Takaful Savings & Investment Programme is an innovative product, bridging the gap of sharia'h compliant solutions in the bancassurance department's product offerings. With the established foundations of Mashreq and the specialized expertise of Badr Al Islami this new scheme allows us to reach out to even more customers who are looking for the most convenient way to save for their needs in future."

In line with other products and services offered through Mashreq and Badr Islami, the scheme is both convenient and affordable. Customers can begin by contributing with a minimal amount of AED 500 per month, and can be obtain policy documents over the counter at Mashreq branches.


Dubai Bank signs strategic alliance with SALAMA for Takaful products

Expanding its portfolio of Islamic insurance plans, Dubai Bank today announced it has entered into a strategic alliance with Islamic Arab Insurance Company (SALAMA), a leading provider of Sharia-compliant insurance solutions (Takaful).

Under the terms of the agreement, SALAMA will offer Dubai Bank customers a wide range of Sharia-compliant unit-linked funds through lumpsum investments as well as systematic investment plans.

In addition to the comprehensive protection benefits provided under the scheme, the plans will also assist the bank's customers to save for short and long-term needs such as education, retirement planning and others.

"Adding a host of Takaful plans from industry experts such as SALAMA will greatly support our customers in realising their personal goals for the long-term financial protection of their families," said Mohamed Amiri, Head of Retail Banking at Dubai Bank. "Offering a diverse range of consumer finance solutions, we seek to be an active partner, helping our customers meet their financial needs. Strategic partnerships with Sharia-compliant entities are central to our overall growth plans and value addition initiatives."

According to industry experts, the global Takaful industry has grown by 20 to 25 per cent per annum in recent years, with the Gulf consistently accounting for around a third of worldwide figures. By 2015, the global Takaful sector is expected to reach US$11 billion.

Noel D'Mello, General Manager, Family Takaful, SALAMA, said: "The current global economic conditions have heightened the need for families to plan prudently for wealth protection and accumulation. SALAMA has specialised in customising systematic investments and savings-linked Takaful plans which provide good value for money to the discerning investor. By partnering with the fast-growing Dubai Bank, we are able to provide the benefits of Sharia-compliant Takaful plans to a niche segment of the UAE population."


Friday, June 26, 2009

A.M. Best to Attend 2009 International Takaful Summit

A.M. Best Co. will attend the 2009 International Takaful Summit, to be held 30 June to 2 July at the Jumeirah Carlton Tower in London.

A.M. Best continues to expand its rating coverage of insurance and reinsurance companies throughout the Middle East, including Takaful. In its methodology on the rating of Takaful, A.M. Best discusses its interactive credit rating process as it pertains to insurance organizations compliant with Islamic beliefs.

Founded in 1899, A.M. Best Company is a global full-service credit rating organisation dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers.


Allianz hails changes in bank distribution

Allianz Malaysia Bhd welcomes the recent deregulation of bank distribution of insurance products but expects some short-term squeeze in margins as the industry adjusts to the new rules.

Chief executive officer Alexander Ankel said the changes recently announced by Bank Negara, specifically with regards to bank distribution, “is something that we welcome because it allows us to broaden our bank distribution capabilities.”

“Other than that, we want to be a reliable insurer to our partners and customers providing products from A to Z,” he said after the company AGM yesterday.

In April, Bank Negara announced a liberalisation package for the financial sector.

Changes for the insurance industry included the issuance of new family takaful licences with higher limits of up to 70% on foreign equity participation in insurance companies and takaful operators, and incentives for the consolidation and rationalisation of the insurance industry.

They also included the removal of restrictions on the establishment of branches and bancassurance tie-ups, and greater flexibility to employ specialist expatriates.

Ankel said the bancassurance deregulation allowed insurance companies to work with more than one bank and simultaneously allowed banks to work with more than one insurance company.

Prior to the change in regulations, the insurer had already been expanding bancassurance as a new channel of distribution, he said, pointing to Allianz’s existing partnership in general insurance with the CIMB group and in life insurance with Alliance Financial Group Bhd.

Allianz’s life insurance business through bancassurance is among the fastest growing in Malaysia, growing in double digits for the financial year ended Dec 31, 2008 and 18% to 19% in its first quarter ended March 31.

“Subsequently, it also means there will be pressure on margins, more competition and for a short period of time, opportunistic behaviour in the market which we will not participate in,” Ankel said.

“We are looking for sustainable partnerships with banks that grow over the years and we don’t just want to be a product provider and throw one product to this bank and another product to that bank; we are not going to play that game.”

On other aspects of deregulation, Allianz General Insurance Company (M) Bhd chief executive officer Ng Hang Ming said Allianz did not intend to open any new branches this year, but would continue its initiative to combine its life and general insurance branches.

Last year, branches in 10 cities in Malaysia had been consolidated and another seven are scheduled to follow suit this year.

The company was also not considering any mergers or acquisitions at this time, said Ankel.

As for the two family takaful licences expected to be open for tender in October, he said Allianz had not made “a strategic decision at this time,”

“Are we seriously considering it? Yes,” he added.


Qatar Insurance Commences Operations

Services can be accessed through internet, making it cost-effective for local, regional and multi-national transactions

Qatar Insurance Services (QIS), which supports trading between insurers, re-insurers, brokers and other (re)insurance professionals, has formally started its operations, reported the Peninsula.

Trading as Qatarlyst, a wholly-owned subsidiary of the Qatar Financial Centre Authority, a web-based work-flow solution that can be accessed through internet, making cost-effective for local, regional and multi-national transactions.

Initially QIS will handle Reinsurance Fac and Treaty business for the major commercial risk classes common to the region - property and casualty (P&C), aviation, marine, construction, space and energy. Later on, it will handle primary insurance of the same classes. It will also handle Shari’a compliant Re-Takaful placements.

James Sutherland, CEO of Qatarlyst, said: “We have created Qatarlyst for the transaction chain which can be made more resourceful through the smart use of sophisticated yet accessible technology. Besides, by building a community of trading counterparties on Qatarlyst, users will benefit from access to potential new business and improved transaction standards.”

The insurance sector is set for major growth in the Gulf region, namely asset management, having around $18 trillion worth assets under management.

--Insurance Business Review

Wednesday, June 24, 2009

Takaful Malaysia eyes 10% increase in customer base with Takaful myDesk

Syarikat Takaful Malaysia Bhd (STMB) targets a 10% increase in customer base from 400,000 currently for its financial year ending June 30, 2010 with the launch of its latest initiative – Takaful myDesk – with Lembaga Tabung Haji (LTH).

Takaful myDesk is a one-stop centre for customers to carry their takaful transactions for all general and family-related takaful products at various LTH branches.

Through Takaful myDesk, STMB also hopes to achieve RM1mil worth of premium contributions in its first year of operations.

STMB group managing director Datuk Hassan Kamil said the collaboration was part of its strategy to enhance access to wider potential customer base, through sharing of database.

“We see this ‘smart partnership’ as a strong platform for various business opportunities, including cross selling of insurance products with investments and savings. We also hope to further reach out to customers, especially in remote areas, utilising LTH’s extensive network nationwide,” he said at the launch yesterday.

He added that the cost of the initiative was minimal as all that was required was Internet connectivity and one staff to man the desk located at LTH’s branch.

STMB’s majority shareholder is BIMB Holdings Bhd, with a shareholding of 65.22%. LTH in turn, is a majority shareholder in BIMB, holding 41.92% shares.

LTH group managing director and chief executive officer Datuk Ismee Ismail said with the inclusion of the Takaful myDesk to its list of additional services, it hoped to help promote the Islamic financial services sector within Malaysia. “Since the introduction of Takaful myDesk at our Jalan Tun Razak branch, LTH’s depositors have been very receptive towards the concept and execution of this new service,” Ismee said.

Due to this encouraging response, Hassan said that they had identified 11 other LTH branches to carry this service, and would be implemented in stages within the next six months.


Monday, June 22, 2009

New Acting Manager for Aman Sharjah and the Northern Emirates

In an attempt to allow Young Emiratis to lead and excel in all business fields, Dubai Islamic Insurance and Reinsurance (AMAN) has promoted Miss Amal Alrayisi to Acting Manager for Aman branch office in Sharjah and the Northern Emirates.

Miss Amal holds several certificates specializing in Takaful. She has also attended several training programs on Takaful and Insurance. Prior to the position, Miss Amal was the assisting manager of Family Takaful and Bancatakaful at the Aman Headquarters in Dubai.

“Appointing Miss Amal as the new Acting Manager for Sharjah and the Northern Emirates is part of our strategy to offer Emiratis exciting and enriching opportunities that will enhance their careers and contribute to the development of this country, said Mr. Hussein Al Meeza, Managing Director and CEO of AMAN.

Mr. Al Meeza added:

“The total number of UAE nationals working at Aman Insurance has increased to 30% however we are always looking to increase that number further.’’

--Eye of Dubai

Minister Highlights Role Of Insurance Firms

Insurance providers have an important role in enhancing the insurance penetration in the country and helping the nation realise its aspiration to become a reputable insurance hub, the Acting Minister of Finance said yesterday.

Pehin Orang Kaya Laila Setia Dato Seri Setia Hj Abd Rahman Hj Ibrahim urged insurance and takaful (Islamic insurance) providers to play a more active role in raising awareness on insurance through public education programmes, highlighting the benefits of insurance with regards to financial planning.

"For its part, the Ministry of Finance will continue pursuing its programme to raise public awareness on financial issues, including insurance and takaful, illegal investment schemes and others," he said.

The Acting Finance Minister said that the government would carry on improving the country's financial sectors. He noted the recent enactment of the Takaful Order 2008 and Takaful Regulations 2008, which aimed to "harmonise" the regulatory framework governing both conventional insurance and takaful activities.

"The regulatory framework will be periodically reviewed to ensure a healthy functioning of the industry in the country," he said.

Aside from onsite visits to local companies and operators, the ministry through its Financial Institutions Division will also discuss areas of development in the sectors with industry players.

Pehin Dato Hj Abd Rahman was speaking during the opening of Great Eastern Life's new branch office in Kg Kiarong. He said that the company, well known as the longest established life insurance firm in Southeast Asia, commenced operations in Brunei more than 30 years ago.

"I highly commend the company, especially for its commitment to a policy of localisation for its human resources needs in Brunei Darussalam, in spite of insurance being a very specialised and sophisticated field of finance," he said.

Speaking on the current global economic crisis, the Acting Finance Minister said that Brunei has managed to "weather the storm relatively well", but stressed that this was not a reason to become complacent.

He called on all stakeholders to cooperate to ensure that this financial stability is maintained through reflecting on the experiences of others and learning from them.

Chairman of Great Eastern Holding Ltd Fang Ai Lian said that the opening was proof of the company's commitment to their policyholders and the people of Brunei.

"For the past 34 years, we have been operating from a rented premise," she said. "Today, we are proud to be the first life insurer in Brunei to operate from an office building we can call our own. This new office comes with improved facilities to allow us to better serve our policyholders".

--Brunei Times

Saturday, June 20, 2009

Firm signs distribution deal

Bahrain-based takaful provider t'azur Company has signed a distribution agreement with Tas'heelat Insurance for its motor and property plans.

"We are delighted to partner with a highly regarded firm such as Tas'heelat Insurance and believe that this will be beneficial to both parties," said t'azur Company chief executive officer Nick Frei.

"With their extensive reach to over 20,000 customers, Tas'heelat Insurance is one of Bahrain's leading retail insurance distributors."

t'azur is dedicated to exceeding the expectations of its participants by setting new standards of takaful innovation and service quality.

Tas'heelat Insurance, in turn, aims to give customers the right information and professional advice, so that they can make an informed decision.

"Tas'heelat Insurance is proud to work with t'azur to introduce their innovative takaful products to our customer base," said Tas'heelat Insurance general manager, Ali Al Daylami.

Promoted by Unicorn Investment Bank, t'azur was established in November 2007 with an authorised capital of $500 million to capitalise on untapped opportunities and immense growth potential across the international insurance sector.

--Gulf Daily News

PQGTL assigned BBB+ rating

Pak-Qatar General Takaful Limited (PQGTL) has been assigned an initial Insurer Financial Strength (IFS) rating of BBB+ (Triple B Plus) by JCR-VIS Credit Rating Co Ltd with a positive outlook.

The rating incorporates strong sponsor support from Qatar-based financial institutions having sound credentials, said a JCR-VIS press release Friday. The rating takes into consideration the focus of the company on establishing a strong control environment, development of manuals and standard operating procedures (SOPs) and implementation of MIS, which has been deployed and tested in International Islamic Financial Institutions.
--Daily Times

Thursday, June 18, 2009

Tradex and Allianz Takaful sign a cooperation agreement

Tradex, the specialist car sales company, and Allianz Takaful have signed a cooperation agreement, which will allow Tradex to start offering Allianz Takaful's Islamic insurance services to its clients.


BIMB will retain stake in Bank Islam, says MD

BIMB Holdings Bhd does not intend to sell its 51% stake in Bank Islam (M) Bhd, says group managing director Datuk Johan Abdullah.

“It is a major core subsidiary and in terms of revenue and net profit contribution, we had about 80% as at last year. This is a strategic investment for us,” he said after the company EGM yesterday.

Bank Islam is currently controlled by BIMB with a 51% stake while Dubai Islamic Investment Group owns 40% and Lembaga Tabung Haji 9% .Talk was rife earlier in the year of a possible merger between Maybank Islamic and Bank Islam.

BIMB has since said it was not in talks to merge Bank Islam with Maybank Islamic but would continue to look for potential partnerships that would be strategic to its business.

Bank Islam managing director Datuk Zukri Samat also said yesterday that the bank was still looking for merger and acquisition opportunities. The RM540mil that it would raise by selling preference shares to shareholders would “give a bit more leeway” for this purpose, he said without elaborating.

On another matter, Johan said talks between its subsidiary Syarikat Takaful Malaysia Bhd and Abu Dhabi-Kuwait-Malaysia Strategic Investment Corp to dispose the takaful operations to the latter were still “ongoing”.

“Due the market conditions, some parameters have changed. We are revisiting a whole wide spectrum of new issues,” he said.


Mena IPO stocks surge 38% in a year

The average appreciation witnessed by IPO stocks in the Mena in the past 12 months is 38.04 per cent, reveals exclusive research by Emirates Business.

This paper tracked 42 IPOs floated since June 2008 on 10 stock exchanges in the Middle East and North Africa (Mena) and found that Dar Al Takaful, listed on the Dubai Financial Market, has seen a 198 per cent appreciation since flotation (August 4, 2008) and is the best-performing IPO so far in the past 12 months.

Others among the top five are the Saudi Stock Exchange-listed United Co-operative Assurance Company (appreciation since flotation: 193 per cent), Damascus Stock Exchange-listed International Bank for Trade and Finance (165.2 per cent) and Arab Bank - Syria (152.4 per cent), and Kuwait-listed Al Soor Fuel marketing Company (147.62 per cent).

The Nasdaq Dubai-listed Damas International brings up the bottom of the rankings, having witnessed a decline of 72 per cent since its flotation on July 8, 2008.

Amman-listed Jordan Masaken for Land and Industrial Development Projects (-31 per cent), Sura for Development and Investment (-30 per cent), United Group Holdings - Jordan (-28 per cent) and Sabaek for Investments (-27 per cent) are the rest of the bottom five.

Dar Al Takaful also saw the most appreciation on the first day of its getting listed (437.5 per cent), while Jordan Masaken for Land and Industrial Development Projects saw its share price plummet 42 per cent on the first day of its listing.

Of the 42 stocks that this paper tracked, 26 have appreciated since their flotation, while 16 have lost in value since flotation. IPOs in the GCC (including Nasdaq Dubai) have performed even better, with 19 IPOs witnessing an average appreciation of 53.57 per cent.

GCC-wide, Saudi Arabia witnessed the most number of IPOs (nine), while the UAE witnessed five IPOs – four on the DFM and one on Abu Dhabi Exchange. Kuwait and Muscat exchanges saw two companies getting listed while Nasdaq Dubai saw one. Mena-wide, the Amman Stock Exchange saw 13 IPOs listed in the past year, while six companies listed their shares on the Damascus Stock Exchange, followed by three on the Casablanca Stock Exchange and one on Tunis Stock Exchange.

The IPO of Drake and Scull International was the most oversubscribed at 101.50 times, while the Alentkaeya for Investment and Real Estate Development was the most undersubscribed at 0.06 times.

--Business 24/7

Tuesday, June 16, 2009

Emirates NBD promotes Shari’ah compliant banking at Jumeirah Beach Residence’s “The Walk”

Emirates NBD, the region’s largest banking group in terms of assets promoted its Shari’ah compliant banking products and services at the Jumeirah Beach Residence on The Walk last weekend.
Emirates NBD displayed its extensive range of conventional Shari’ah compliant savings and protection plans which assist customers in reaching their monetary planning goals. The plans offer help with areas such as children’s education, retirement, life & accident protection, long term capital appreciation and general savings. There were some exciting prizes also on offer for interested parties including Magrudy’s vouchers and various dinner vouchers.Emirates NBD’s Takaful and Savings Programme is a Shari’ah compliant, regular savings plan that helps customers increase their savings over a certain duration with Takaful protection for a secure future. Takaful is an Islamic insurance concept based on the principles of the Islamic banking transactions mutual assistance and voluntary contribution. This product consists of choices between monthly, quarterly, half yearly, yearly and low regular contributions.There is also an option of professionally managed Shari’ah compliant investment strategies. In addition this programme offers online underwriting approvals. The Super Saver is a savings scheme with choices on professionally managed funds. It consists of low regular contributions, lump sum options and monthly, quarterly, half yearly and yearly contributions.Mr. Suvo Sarkar, Vice President and General Manager Retail Banking at Emirates NBD said, “We are always devising innovative ways to be near our customers. It is essential to take our services to them and provide them with the details of our many products and banking alternatives. Today’s customer is always on the go, therefore we adapt to better suit their needs by becoming more mobile and utilizing effective channels to create more awareness about the products and services that are available for customers to take advantage of. Our initiatives are always centered around the customer and what is most convenient for them.”This booth at The Walk provided an easy way for customers to learn more about these programmes. The convenient location allowed Emirates NBD to reach out to customers and offer them comprehensive information on the bank’s many Shari’ah compliant banking methods.


Wednesday, June 10, 2009

Noor Takaful Teams up with Mondial Assistance Group to Launch Travel Takaful Services

Noor Takaful, the Islamic insurance arm of Noor Investment Group, today announced it has teamed up with Mondial Assistance Group, the world’s largest provider of emergency services, to launch Travel Takaful comprising a wide spectrum of support services for contingencies arising during foreign travel.
Coinciding with the approaching holiday season, ‘Travel Plus’ and ‘Travel Gold’ are value-added, tailor-made takaful packages designed to assist customers who may need assistance during flight cancellation and delays, loss of luggage, emergency situations, incurring of specific liability, and covering of accident and medical expenses.

Parvaiz Siddiq, CEO, Noor Takaful, said: “Noor Takaful prioritises the delivery of products and services that have the convenience of our customers at its core. Our travel solutions offered in conjunction with Mondial Assistance is guaranteed to provide an effective and professional response to travel emergencies at any given time of the year. We are confident that both offerings will be widely welcomed by our customers for its broad-ranging benefits, particularly with the upcoming travel season.”

--Eye of Dubai

PQFTL, ICAP sign Takaful agreement

Pak-Qatar Family Takaful and Institute of Chartered Accountants of Pakistan have signed an agreement under which all the members, students and employees of ICAP across the globe will be provided with an option of having Group Family Takaful protection through Pak-Qatar Family Takaful. Pak-Qatar Family Takaful CEO P Ahmad and ICAP-Benevolent Fund President Khaliq-ur-Rahman signed the agreement on behalf of their respective organizations.

--Daily Times

Tuesday, June 9, 2009

71 percent participants appreciate Islamic banking: survey

In the first national survey on Islamic banking and Takaful, conducted in 85 cities of Pakistan, 71 percent of the participants appreciated it. A spokesperson of AlHuda Centre of Islamic Banking and Economics (CIBE ),on Monday, revealed that they conducted the first national survey on Islamic banking and Takaful to analyse the trends, problems, opportunities and challenges of Islamic banking and the Takaful Industry.

The survey was started on April 15 and closed on May 15, covering 85 cities, including Peshawar, Quetta, Islamabad, Karachi, Lahore, Azad Kashmir and many other small cities of Pakistan. The target audience of the survey was the Chamber of Commerce, Business and Trade associations, Universities and professional institutions like the ICMAP, ICAP, etc. This is the first-ever survey in Pakistan for preparing effective strategies concerning trends about Islamic banking and Takaful.

In this survey, 71 percent of the participants appreciated Islamic banking and Takaful. 13 percent, thought it to be the same as conventional banking and insurance, while 16 percent did not give an opinion from ignorance about Islamic banking. 41 percent admitted that Islamic banking services are available in their region, while 59 percent denied that Islamic financial institutions existed in their regions.

It was also revealed that only 11 percent availed the benefits of Islamic banking benefits, while 89 percent had their account in conventional banks. When conventional account holders were asked, they replied that they 'would favour Islamic banking if they were offered the same facilities,' 63 percent said 'yes' and 31 percent said 'no', while six percent remained neutral.

When Islamic banks account holders were asked about the products for financing, 38 percent named Ijarah, 34 percent Diminishing Musharkah and Murabah, while the rest mentioned other products.

--Business Recorder

Friday, June 5, 2009

DFM makes gains to break 2,000 barrier

Dubai Financial Market broke through the "psychologically important" 2,000-point barrier yesterday, sustaining a bull-run for the eighth consecutive session.

In what experts termed a great relief for anxious investors and financial institutions, the DFM general index closed at 2,025.55 points and showed a net gain of 1.82 per cent, or 36.17 points, compared to its previous close of 1,989.39 points.

"The DFM index broke the important psychological mark of 2,000 points yesterday. Going by the encouraging and positive trading, a 2,200-level is possible soon. We will see some profit taking also," said Sherif Abdul Khalek, trading manager at Beltone Financial Institution.

The DFM general index opened lower at 1,960.56 points and immediately eased to 1,955.91 points before rising towards the key 2,000 mark at 11am.

The buying support in Deyaar, DSI, Arabtec, DIB, Gulf Navigation, Mazaya, Takaful-Emarat, Dar Takaful and Emaar stocks took the index to its higher levels. The closing level of 2,025.55 remained the day's highest and this indicates the positive buying support throughout the session.

Trading value remained on the higher side, with a turnover of Dh1.7 billion and more than 1,235 billion shares traded in 16,696 transactions. The main volume pushers were Emaar, DFM, Deyaar, DSI and Arabtec.The list of losers includes Ekttitab, Shuaa, Al Salaam-Sudan and ACICO.

In the capital, the Abu Dhabi Securities Exchange, after witnessing significant gains on Wednesday, closed flat yesterday on the back of profit taking. Showing a mixed trend, the ADX index eased 6.90 points, or 0.25 per cent, at 2,803.16 points. The turnover was recorded at Dh711m with 417 million shares changing hands in 6,086 transactions. Sixteen stocks closed higher with an equal number moving down, while eight scrips remained unchanged in value. The shares of Aldar, Sorouh, Dana Gas, Abu Dhabi National Energy Company (Taqa), RAK Bank, Emirates Driving and Asmak fell.


New avenue to issue bonds

Securitisation of takaful premiums is possible but subject to thorough study
With the corporate bond market in a moribund state, another avenue for bond issuance is via the securitisation of takaful premiums.

According to Syarikat Takaful Malaysia Bhd (STMB) chief investment officer Azian Kassim, the idea is possible but it should be subjected to a thorough study “as the underlying principles of takaful business is totally different (from) that of conventional.”

Maybank Investment Bank Bhd fixed income research head Tan Chee Wee noted that car financing had already been securitised.

“It is the same as the securitisation of car financing – those borrowers are making the monthly payments that are in turn channelled into payment of interest rates on the bonds issued against these auto loans,’’ he said.

In this case, it would be the takaful policyholders who would be providing the cashflow.

“I would say it works, but the important thing is from an investor’s point of view to not just look at the structure but also understand the background of those who bought takaful insurance,” Tan said. “At the end of the day, it boils down to the individual credit of all the people who have taken (takaful) insurance and who are paying the premium on a yearly basis.”

At present, an example of an auto finance-backed corporate bond is the secured fixed rate bond issued by Cepat Assets Bhd.

Securitisation, the process of pooling and repackaging cashflow-producing financial assets into bonds, will provide an opportunity for takaful operators to unlock the value of the underwriting business by transferring certain portions of risks to capital markets.

Azian said the move would require “concerted efforts from various parties for this to happen and among other things, the regulator and syariah board need to be involved.”

“As no such product has been made available in the Malaysian market, the regulatory requirements are yet to be determined. However, given the recent fallout of the collateralised debt obligation (CDO) market in the United States, it is assumed that the regulatory bodies would be very stringent in approving such products,” she added.

For the syariah board, concerns involve the structure for the transaction and also the usage of takaful contributions as the underlying asset.

“At this juncture, there is no plan to securitise takaful contributions. However, we would keep our options open to this new innovative capital market instrument. Should there be any opportunity to embark on such a transaction, the viability of such exercise would be assessed accordingly before any decision is made,” she said.

For the year ended Dec 31, 2008, the total net contribution income for all the takaful operators was RM3.025bil, while total takaful fund assets stood at RM10.569bil.

As to how much this would translate into the potential value of bonds, Azian said: “We do not have any estimates as this is still subject to a detailed study by all respective parties especially capital market players.”

Due to the global financial crisis, there have been calls to move away from complex securitisation schemes since the US subprime collapse is partly blamed on asset-backed securitisation linked to mortgages.

“In our view, the subprime crisis was not a result of complex securitisation schemes but due to a combination of a lack of regulatory supervision and proper assessment by the investors,” she added.

Azian reckoned that the securitisation of takaful contributions would spread the risk more broadly rather than just “warehousing” it in a particular takaful company which has lower capacity and diversification potential than the capital market as a whole.

“The removing of risks from the takaful industry would reduce transaction, agency and regulatory costs, thus increasing the efficiency of capital. Investors would also benefit from the availability of new classes of securities.

“Furthermore, securities based on risks associated with the takaful industry such as catastrophic, mortality and longevity risks are likely to have a relatively low co-variance with market systematic risk, making them even more valuable for diversification purposes,” she said.

However, Azian cautioned that such securitisation must be accompanied with stringent surveillance from the regulatory bodies and proper product education.

--The Star Online

Manulife to apply for takaful licence soon

Insurer Manulife Holdings Bhd will submit an application before the end-October deadline for a takaful licence in a bid to tap into the growing Islamic insurance market.

The plan by Manulife to seek a takaful licence is in line with the Government’s move to liberalise the financial sector and allow more takaful players into the market.

The liberalisation, among others, would see up to two new family takaful licences being granted this year and allow, with immediate effect, the increase in foreign equity participation in insurance companies and takaful operators to 70% from 49% now.

Group chief executive officer Michael Y.L. Chan said as a company with a global reach and experience, Manulife was heeding the Government’s call to make Malaysia a regional Islamic finance hub.

“We, too, want a slice of the booming takaful market as the present penetration rate in this segment is about 7% compared with about 40% in the conventional side,’’ Chan told StarBizWeek.

Having a takaful business fits into the group’s aspirations as currently, it has takaful operations in Indonesia.

Chan said it would also be beneficial to the group as the takaful operations could be later expanded to the Philippines, Thailand and China, where Manulife Group had a significant presence.

On whether there are plans by its foreign shareholder, Manulife Financial Corp, to increase its stake in the company with the financial sector liberalisation, Chan said it had plans but, at the moment, there were no firm decisions by the board.

On its newly-formed unit Manulife Unit Trust Bhd, Chan said the company would launch three funds in September – a global resources fund, a China-related product and a fund that would invest solely in India.

He said the global resources fund would be the first to invest in precious metals and energy.

As for the China and India funds, Chan said these two economies were powerhouses of Asia and offered huge markets, and they experienced good growth despite the grim economic environment.

He also expects 300 of its total agency force of nearly 1,500 to sell unit trusts this year and about 50% to do so in 2010.

As for its new business premiums, Chan said Manulife expected a 5% growth this year from RM63mil achieved last year.

He said the company planned to unveil two life protection-based products by year-end.

--The Star Online

Takaful Ikhlas Implements Corporate Social Responsibility

The Minggu Saham Amanah 2009 (MSAM 09) in Johor Baharu in April and the Program Bersama PNB organised by Permodalan Nasional Berhad (PNB) in Kuching in May, offered space and ample opportunities for companies as well as banking and financial institutions to reach out to their target groups.

Takaful Ikhlas Sdn Bhd (Takaful IKHLAS), a company offering products and Syariah-based financial protection services for one, made maximum use of the opportunity and platform to implement its corporate social responsibility (CSR).

According to Takaful IKHLAS in a statement here today, in conjunction with the MSAM 09 and Program Bersama PNB, the company had undertaken various activities related to CSR such as a free medical examination and play activities with elements of education, apart from disseminating information on investments and financial planning to the community.

Takaful IKHLAS also handed over zakat contributions while undertaking a blood donation campaign.

Apart from helping in the social development of the local community, contributions as well as the community activities sponsored, were aimed at rewarding them irrespective of race or religion, the statement said.

According to the statement, the free medical examination received encouraging response from the public. At the MSAM 09 in Johor Baharu, this activity saw the participation of 600 visitors over the two days it was held.

Takaful IKHLAS also donated five nebuliser units -- equipment used by patients suffering from respiratory illnesses such as bronchitis and asthma-- to the Johor State Health Department.

At the Program Bersama PNB 09 in Kuching, Takaful IKHLAS sponsored the prizes for a children's drawing competition. It attracted 500 children from 49 KEMAS kindergartens in Kuching.

Takaful IKHLAS which began operations in July 2003 is a subsidiary of MNRB Holdings Berhad, an investment holdings company listed on the main board of Bursa Malaysia, with its main shareholder being PNB Berhad through Skim Amanah Saham Bumiputera.

Takaful IKHLAS has two customer services centres in Kuala Lumpur and Selangor as well regional offices in Kuala Lumpur, Kota Baharu, Johor Baharu, Sungai Petani, Kuching, Malacca, Kota Kinabalu, Kuantan, Ipoh and Putrajaya.


Lawsuit arguing AIG bailout is unconstitutional can proceed

A lawsuit arguing that the federal bailout of American International Group Inc. is unconstitutional will be allowed to proceed in a federal court in Michigan.

The decision, handed down last week in the U.S. District Court for the Eastern District of Michigan, was made after a judge determined it was unconstitutional for AIG to receive the bailout funds from the U.S. government because AIG has subsidiaries that sell insurance designed to comply with Islamic law.

The suit, filed in December by Kevin J. Murray—a Michigan resident, a former U.S. Marine and a Catholic—alleges the U.S. Treasury Department and the Federal Reserve Board violated the Establishment Clause of the First Amendment. Mr. Murray, who filed the lawsuit “as a taxpayer,” alleged that the “appropriated funds (to AIG) are being used to finance Sharia-based Islamic religious activities” and are therefore “constitutionally impermissible,” according to court documents.

At the time the suit was filed, the U.S. government took a nearly 80% stake in the troubled New York-based insurer. The government has given AIG about $182.5 billion in aid to help the insurer avoid bankruptcy.

In December after receiving federal bailout money, AIG announced that it would provide takaful insurance, or insurance that complies with Islamic law, in the United States. In such an arrangement, members contribute money to a pool to guarantee each other coverage against loss or damage.

Though AIG had offered takaful insurance internationally prior to its troubles, the fact that the insurer made it available in the United States after bailout funds were received provided Mr. Murray with standing to bring the suit, Judge Lawrence P. Zatkoff said in his opinion.

“These facts, taken together, raise a question of whether the government’s involvement with AIG has created the effect of promoting religion and sufficiently raise plaintiff’s claim beyond the speculative level.” Judge Zatkoff added: “The financial circumstances of this case are historic, and the pressure upon the government to navigate the financial crisis is unfathomable. Times of crisis, however, do not justify departure from the Constitution.”

--Business Insurance