Malaysia’s former premier charged with corruption, Pakistani authority pushes for single-law approach and Nigeria poised for the launch of a sophomore Islamic bank. All these and more in this week’s IFN weekly market roundup.
Najib Razak corruption case begins
Amid ongoing investigations into 1MDB, Malaysians were on the edge of their seats this week as former prime minister Najib Razak was arrested and charged with criminal breach of trust and abuse of power linked to the SRC International corruption case. The charges include three counts of breach of trust committed when Najib was given the power to manage RM4 billion (US$987.31 million)-worth of funds at AmIslamic Bank (now AmBank Islamic) belonging to SRC in December 2014. Najib, who was also the ex-finance minister, pleaded not guilty to the charges.
Separately, Najib’s brother, Nazir Razak, who is the chairman of CIMB Group, said that he is still undecided on his tenor in CIMB which will end in August 2019. Following reports claiming that he would not be seeking extension, Nazir said that he has not decided whether to seek an extension nor has he been in communication with anyone or any bodies about his position.
Following the resignations of top management of government agencies since the 14th general election, Lembaga Tabung Haji this week announced that the two-year contracts of Group Managing Director and CEO Johan Abdullah and Deputy CEO Badlisyah Abdul Ghani have ended on the 30th June 2018. The contracts of board members Badruddin Amiruldin and Mohamad Aziz also ended on the same date. In May, its ex-chairman, Abdul Azeez Abdul Rahim, tendered his resignation. The pilgrim fund was alleged to have been involved in the 1MDB corruption scandal, where it purchased a piece of land in the Tun Razak Exchange, which was viewed as a bailout for 1MDB.
DGCX realizes best first half in 13 years
The Dubai Gold and Commodities Exchange (DGCX) traded over 11.3 million contracts so far in 2018, up 44% year-on-year. Since the launch of its Islamic gold spot contract in March, over 520 kgs of gold worth US$22 million have been traded on the DGCX. The exchange also partnered with Standard Chartered to allow clearing members of Dubai Commodities Clearing Corporation to deliver eligible global securities as collateral, a deal which will see members use UK and US government treasury bills, bonds and other approved fixed income securities.
SECP meets resistance on proposal
The Securities and Exchange Commission of Pakistan (SECP) received mixed reactions to its idea of replacing existing laws with a single law for Shariah compliant companies. The Pakistan Banks Association agreed with the SECP but the Federal Board of Revenue; the State Bank of Pakistan’s Rizwan Ahmed Naqshbandi, the deputy legal advisor in the Legal Services Department; and Mufti Dr Khalil Ahmad Aazami, the chairman of the Shariah Board of Bank Alfalah, have reportedly opposed the proposal, according to Business Recorder.
Kenya’s Takaful regulation to be launched this year
Kenya’s Takaful aspirations are inching closer to reality as a draft regulation on Islamic insurance developed by the Insurance Regulatory Authority (IRA) is expected to be presented to National Treasury Cabinet Secretary Henry Rotich for endorsement, Mediamax Network reported. The regulation is expected to be in place before next year. In line with this, the IRA received license applications for a fully-fledged Takaful business and three Takaful window operations.
Bangladesh eyes Sukuk
Bangladesh is looking to sail its sovereign Sukuk boat in an aim to enhance its Shariah finance industry, The Daily Star reported citing Bangladesh Bank’s Deputy Governor Abu Hena Mohd Razee Hassan. The news portal also said that two or three local teams have visited other Islamic banking players like Malaysia and Bahrain to gain experience on issuing Sukuk, and another team is anticipated to do the same soon.
Islamic financial services industry hits US$2 trillion
The global Islamic finance industry gave a “better than expected” performance in 2017, marking the most assured sign of recovery since the global financial crisis of 2007-08, according to the IFSB’s Islamic Financial Services Industry Stability Report 2018, which was launched this week. The report found that the global Islamic financial services industry surpassed the US$2 trillion mark; with a yearly growth of 8.3%, bolstered by the performance of the Islamic capital markets, particularly Sukuk offerings by sovereigns and multilateral institutions.
The report was launched in Kazakhstan, which also witnessed Dubai Multi Commodities Centre and the Astana International Financial Centre collaborating to jointly develop financial and professional services as well as to facilitate the exchange of expertise in relation to the trading of commodities.
Second Islamic bank for Nigeria
Following the establishment of Jaiz Bank five years ago, Nigeria is gearing up to launch its second fully-fledged Islamic bank. The Sokoto state government subscribed to NGN1 billion (US$2.77 million)-worth of shares and became a shareholder of an interest-free bank in the north of Nigeria. The industry is currently waiting for the Central Bank of Nigeria to complete the formalities for the takeoff of the bank.