KUALA LUMPUR, March 24 RHB Islamic, the sharia
arm of RHB Capital, Malaysia's fourth biggest lender,
says its corporate business may benefit as firms look to
maintain sharia-compliance for their shares on the local bourse.
Last November the Securities Commission revised the list of
sharia-compliant securities approved by its Shariah Advisory
Council, using a new screening method which includes financial
The revised list features 653 sharia-compliant securities,
or 71 percent of those on Bursa Malaysia; the regulator added 16
new ones and removed 158 that were on the previous list issued
in May 2013. The list is issued twice-yearly.
Firms looking to convert a portion of their conventional
debt to sharia-compliant debt, in order to meet the new
standards and restore or maintain their sharia status, have
sought help from Islamic banks.
"As usual, the market always reacts to guidelines or
instructions," Nora Tahir, head of Islamic finance at RHB
Islamic, told Reuters.
"As they try to switch, banks will try to take each other's
customers. We must be able to retain these people on our books."
Government-linked firms, such as property builder Malaysian
Resources Corp, may be among those acting to preserve
their sharia status, to ensure institutional investors such as
the Employees Provident Fund and Lembaga Tabung Haji keep access
to their shares.
The most recent list of sharia-compliant stocks saw the
exclusion of firms including AirAsia, Bumi Armada
and SP Setia.
The RHB group hopes to double its sharia financing assets to
30 percent of the total in 2017 from 15 percent today. During
the next few years it plans to adjust the organisation of its
Islamic operations, which are still run across separate
commercial and investment divisions.
"We want to enlarge the kind of offering we do for the
retail customer - if it's fragmented like this we cannot offer a
lot of products. As a banking group we have the resources. We
need to get together to coordinate our efforts," said Nora.
RHB Islamic plans soon to issue a 1 billion ringgit ($303
million) Basel III-compliant sukuk, becoming only the second
sharia bank in the region to do so.
(Reporting by Al-Zaquan Amer Hamzah; Editing by Andrew Torchia)