All Is Not Hunky-Dory On The Islamic Financial Products Front.
Why is Malaysia unable to sell Islamic Financial Products in West Asia? Is it akin to selling coal to Newcastle? Or did we over-estimate the Islamic sentiment when pushing the products?
According to head of Commerce International Merchant Bankers Bhd (CIMB) Islamic, Badlisyah Abdul Ghani, it is due to the currency and pricing of the instruments. He said West Asian investors typically invested in major currencies like the US dollar or pound sterling but for pricing, they wanted good credit and high yield.
"What I have been trying to say is that you must first look at the currency of the instrument and secondly, the pricing of the instrument that you are selling. If these two do not meet the requirements of the West Asian investors, then why bother?" he said.
He was speaking to reporters after sitting in a discussion panel on "Global Acceptance of Malaysian Islamic Products" at the Malaysian Islamic Finance -- Issuers & Investors Forum 2006 here Tuesday.
Badlisyah said most people thought that Malaysia's inability to sell Islamic products in West Asia was due to the Syariah interpretation or Syariah products.
"They (West Asian investors) want the likes of Petronas, but at 200 basis points over London Interbank Offer Rates (LIBOR). That is something you can't give them," he said. Badlisyah said pricing in Malaysia was quite tight "as we have quite good credit in the global market", citing power utility Tenaga which "can get 30 basis points below LIBOR".
"And this is something that the West Asian investors, especially the financial institutions, just can't see because their cost of finance is already 50 basis points over LIBOR... and they can't finance anybody below that," he said.
Asked about the difficulties in attracting institutional investors based on currency and pricing, Badlisyah said: "We can attract them but we give them products that would meet their requirements." "They want high yield, so you go to them with Real Estate Investment Trusts (REITs), property funds, private equities... things that provide that kind of credit profile," he said.
**** So basically when it comes to money there is no room for religious sentiments and 'helping' fellow Muslim brothers. The operative word is profit and more profit wherever they can get it, and it does not matter from whom. How do you think the Israelis are surviving and thriving amidst these Arabs?
According to head of Commerce International Merchant Bankers Bhd (CIMB) Islamic, Badlisyah Abdul Ghani, it is due to the currency and pricing of the instruments. He said West Asian investors typically invested in major currencies like the US dollar or pound sterling but for pricing, they wanted good credit and high yield.
"What I have been trying to say is that you must first look at the currency of the instrument and secondly, the pricing of the instrument that you are selling. If these two do not meet the requirements of the West Asian investors, then why bother?" he said.
He was speaking to reporters after sitting in a discussion panel on "Global Acceptance of Malaysian Islamic Products" at the Malaysian Islamic Finance -- Issuers & Investors Forum 2006 here Tuesday.
Badlisyah said most people thought that Malaysia's inability to sell Islamic products in West Asia was due to the Syariah interpretation or Syariah products.
"They (West Asian investors) want the likes of Petronas, but at 200 basis points over London Interbank Offer Rates (LIBOR). That is something you can't give them," he said. Badlisyah said pricing in Malaysia was quite tight "as we have quite good credit in the global market", citing power utility Tenaga which "can get 30 basis points below LIBOR".
"And this is something that the West Asian investors, especially the financial institutions, just can't see because their cost of finance is already 50 basis points over LIBOR... and they can't finance anybody below that," he said.
Asked about the difficulties in attracting institutional investors based on currency and pricing, Badlisyah said: "We can attract them but we give them products that would meet their requirements." "They want high yield, so you go to them with Real Estate Investment Trusts (REITs), property funds, private equities... things that provide that kind of credit profile," he said.
**** So basically when it comes to money there is no room for religious sentiments and 'helping' fellow Muslim brothers. The operative word is profit and more profit wherever they can get it, and it does not matter from whom. How do you think the Israelis are surviving and thriving amidst these Arabs?
posted by The Malaysian. at 8/15/2006 07:22:00 PM
3 Comments:
Thanks for higlighting these 'uncompetitive' products our GLC banks has been championing. No wonder B.I. has non-performing loan (NPL) portfolio of RM2.2 billion back in Dec, 2005.
Although it is claimed B.I. didnt require Taxpayers money in bail-out, Dana(ehem) and Danamo(ehem) was involved, so you can guess where majority of the 'hep' comes from.
But if these I. Banking are not handled by 'real' bankers or someone who has been in the banking business for awhile, it will continue to reel in 'unsound' business and merely serves as a Hand-out financial Institution.
Now, that's better than winning the 4D.
Now what happened to the Gold Dinar that was supposed to replace the US dollar ? Died with TDM out of power ?
Gold dinar? Dead and gone without a decent burial.
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