Malaysia

Should the deal take place, it would generate a combined market value of $28.5bn.

Remarkable growth Between 2006 and 2010, Islamic Finance has seen a 19 per cent CAGR (compound annual growth rate) - bringing it to an estimated global value of USD 1 trillion. Future growth predictions are even more remarkable, with some forecasts suggesting Islamic Finance could continue to grow at more than four times the rate of conventional finance – and forecasting it to reach USD 5 trillion in value by 2016. Whilst approximately 80 per cent of this business is in the Middle East, Asia represents a significant market with Malaysia having a sizable 12 per cent market share and Indonesia witnessing strong growth (forecast to grow by 55 per cent in 2011). The Malaysian Islamic financial sector is seen as one of the most progressive and attractive in the world. Asia driving growth One of the main drivers for the rapid growth in Islamic Finance is an increasing Muslim population. As at 2009 the global Muslim population stood at 1.6 billion (October 2009 study by the Pew Research Center report of Mapping the Global Muslim Population). The majority – 62 per cent - is in Asia. This population is increasingly demanding Sharia compliant banking products. Global significance Perhaps because of this strong growth, there is increasing awareness of Islamic Finance in the non-Muslim world. · Governments are increasingly supportive with tax laws and regulations accommodating Islamic Finance (e.g. Australia, France and the UK) · In 2009, General Electric issued its first Sukuk, as Western companies are issuing the Islamic equivalent of bonds · The Vatican issued a statement of support in March 2009, commenting that the ethical principles on which Islamic Finance is based may bring banks closer to their clients and to the true spirit which should underpin every financial service · In 2010, the US White House appointed a Sharia finance specialist · Global financial institutions are increasingly active through the opening of Islamic Windows There are risks… but there is a solution There is much talk within the market about standards. This usually focuses on differences in interpretation of Sharia when related to finance, and the shortage of suitably qualified Sharia scholars to take up board positions at financial institutions. However, there is another aspect to standards that is crucial for a young and rapidly growing market: the standardization and automation of business processes. As the volume of Islamic financial transactions increases, so too do the risks associated with manual processing.

The Issue of Choice In February 2011, KPMG last wrote about the issues regarding the infrastructure and regulation of Islamic banking in Malaysia. In continuing this series on this topic, we will move on to examine Islamic banking’s challenges in differentiating itself from conventional banking in the already crowded market and where the opportunities exist in Malaysia for it to become a truly innovative market leader in certain sectors. Islamic finance at its heart offers a system of finance for both individuals and companies that are based on principles of Shariah law.

The fund, designed to provide a safe haven and act as a hedge against inflation, will be marketed starting August 11 at initial minimum investment of $329.76.

This is assuming that inflation is maintained around the 3% level.

RHB Capital Bhd may revisit a potential merger with AMMB Holdings Bhd after failed deals with CIMB and Maybank.

Maybank pulled out of negotiations for the purchase of RHB Capital because of the prohibitive price.

Moody’s says GDP growth of 5% - 6% will help support the banking sector’s sustainability in earnings.

Mayban IB Holdings can exercise its right of compulsory acquisition of all Kim Eng Shares at US$2.51 per share.

The new line-up to prepare the lender to take advantage on growth opportunities in the country and region.

CIMB plans to have talks with Aabar Investments regarding the merger.

The lender’s Malaysian presence in Malaysia will foster the financial linkages between Kuala Lumpur and Banrain and to develop the Islamic financial system in the country.

HSBC, CIMB, Maybank, and Citibank to lead sukuk issue as Malaysia plans to repeat roadshows conducted in Asia, the Middle East and Europe.

VietinBank launched programmes in line with the socio-economic development orientation of the government and the State Bank of Vietnam  to support agriculture, rural development and export activities, the bank's representative said.

Maybank will only proceed with the purchase if it adds to earnings to be used to compete with Chinese banks’ entrance in Malaysia.

RHB Bank has launched the e-Dividend service through its Reflex Online Cash Management for corporate clients.