16 theSun | THURSDAY JULY 9 2009

business

High-Speed Broadband project to boost Takaful Malaysia

GDP by 0.6% by 2017, says TM eyes over 50%
KUALA LUMPUR: The High-Speed Broad-
band (HSBB) project is expected to boost the
national gross domestic product (GDP) by
0.6% and create 100,000 jobs by 2017, says
Telekom Malaysia Bhd (TM).
The telecommunications company said the
investment to date in building the HSBB infra-
structure had benefited Malaysian companies
considerably, with related contract work given
to about 200 local vendors from 2008.
“Even at this early implementation stage,
the HSBB project is already benefiting Malay-
sian companies and businesses. This boost
also comes at a time of difficult economic
conditions for local vendors and businesses,”
said TM group chief executive officer Datuk
Zamzamzairani Mohd Isa in a statement
yesterday.
“TM has also invested resources and is
continuing to do so in boosting human capital
development to ensure that the workforce
involved in the project is equipped with the
relevant skill sets and know-how,” he added.
In line with TM’s efforts at boosting the
development of human capital related to
the HSBB project, the company has also
launched a three-year vendor development
programme.
This is to ensure that its external local
contractors have the requisite capacity and
share of the BToto group of 32.68 sen
capability to undertake HSBB-related work.
On the physical infrastructure side, TM has
committed over RM600 million for the deploy-
ment of Fibre-to-the-Home (FTTH) Passive
infrastructure over the next three years.
“While local companies and businesses
have been major beneficiaries of the imple-
mentation of the HSBB network to date, the
continued rollout of the RM11.3 billion project
in the coming years, will bring more benefits to
a broader cross section of Malaysian society.
“This is in terms of capacity building, local
content development, Internet Protocol (IP)
technology transfer and end-user experience,”
Zamzamzairani said. – Bernama
market share
KUALA LUMPUR: Syarikat Takaful Malaysia Bhd
aims to capture more than half of the takaful indus-
try’s total asset market share within the next two years
amid the current economic slowdown.
Group managing director Datuk Mohamad Has-
san 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 taka-
ful market rate, which is between 20 and 25% per
annum,” he told a media briefing after signing an
agreement with Standard Financial Planner Sdn Bhd
(SFP) here yesterday.
SFP, which was set up in 1999, is one of only 10
licensed financial advisers in Malaysia.
It is a member of the Australian-based Professional
Investment Group of Companies that operates across

B-Land raises
for the financial year ended April 30,
2009, it said.
The placement was not subject to the
approval of any authority and the share-
holders of B-Land, the company said.
As a result of the placement, B-Land
group’s total equity interest in BToto
seven countries.
Hassan said under the agreement, SFP would
market Takaful Malaysia’s products through its na-
tionwide network of more than 300 representatives,
of which 75% were licensed financial advisers with
Bank Negara Malaysia.
He said the addition of SFP to its existing portfolio

RM190m from will be reduced by 3.18% to 596.27 mil-
lion shares representing 47.48% of the
paid-up share capital of BToto, it said.
Tan Sri Vincent Tan, a major share-
holder of B-Land, had also concur-
rently placed out a total of 15.6 million
shares in BToto, thus reducing his
of distribution channels would boost the company’s
revenue by 10%.
“This will enhance the penetration rate of our
family and general products into the middle-upper
Malaysian market as well as making them more ac-
cessible wider customer base.
“We will work closely with SFP’s financial advis-

BToto placement
KUALA LUMPUR: Berjaya Land Bhd
(B- Land) announced it has placed out
a total of 40 million shares in Berjaya
Sports Toto Bhd (BToto) for RM190
million or at a placement price of
RM4.75 per share.
The net proceeds from the
placement will be utilised to meet
part of the redemption of B-Land’s
RM848.1 million five-year 8% secured
exchangeable bond maturing on Aug
15, 2011.
The balance of the proceeds, if any,
will be for working capital purposes of
the group, B-Land said in a statement
on Tuesday.
The placement price represents
a discount of 30 sen or 5.94% below
the average market price of BToto
shares for the past three days and a
price-earnings multiple of 14.53 times
based on the unaudited earnings per
direct interest to 54.5 million shares
representing 4.34% stake in BToto.
Therefore, Tan together with the
Berjaya Corporation Berhad group
(including the B-Land group) now has
on aggregate of 53.01% stake in BToto,
B-Land said.
The company also noted that in
spite of the weak market conditions,
there was ample interest to absorb a
total of 55.6 million shares or about
4.5% of B-Toto, raising some RM264.1
million cash.
The inclusion of BToto within the
30-stock index of the FBM-KLCI and the
success of this placement is further tes-
timony of BToto’s good standing within
the investment community, it added.
ers 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
Husband million for the third quarter ended March 31, 2009
and wife compared with a pre-tax profit of RM11.07 million in
the same quarter last year.
sparkle Revenue declined to RM187.667 million from
as ‘health RM280.678 million previously. – Bernama
watch’
winners
pg 18 Firefly to add three
more aircraft
KUANTAN: FlyFirefly Sdn Bhd (Firefly), a subsidiary
of Malaysia Airlines (MAS), will recieve three more
ATR72-500 turbo-propeller aircraft next year.
Firefly managing director Eddie Leong said the
aircraft which cost US$18 million (RM63.8 million)

Islamic fund growth stalls but investable
assets grow, says Ernst & Young
by Tim Leonard
newsdesk@thesundaily.com
KUALA LUMPUR: The 3rd Annual
Ernst & Young Islamic Funds & Invest-
ments Report (IFIR) 2009 indicated
that Islamic indices performed poorly
worldwide in the face of a global eco-
nomic slowdown.
The report, released at the World
Islamic Funds and Capital Markets
Conference recently, saw average
returns from Islamic equity funds to
have fallen to -39% last year compared
with a 23% return in 2007.
In the first quarter of this year, the
average returns stood at -3.7%. Aver-
age Islamic fixed income fund returns
dropped from 3% in 2007 to 1% last
year and the first quarter of this year.
The report also stated that syariah-
sensitive investable assets last year in
the Gulf Cooperation Council (GCC) and
Asia touched US$736 billion (RM2.612
trillion) as compared with US$267 bil-
lion (RM947.85 billion) in 2007.
The figures were derived from
computing the total asset size this year
and includes Awqaf and Endowments,
Takaful operators in Malaysia, sovereign
wealth funds in the Middle East & North
Africa (MENA) region and Asia, besides
including the markets of Pakistan and
South East Asia - all of which were not
included in last year’s figures.
This translates into a potential an-
nual revenue pool of US$3.86 billion
(RM13.7 billion) for the Islamic asset
management industry.
Fund sizes however remain small,
with over 50% having assets under
management of US$20 million (RM71
million) or less.
Some 25 Islamic funds were liqui-
dated last year and the first quarter of
this year while 18 were liquidated in
2006 and 2007. The number of new
funds launched dropped from 271 in
2006 and 2007 to only 89 last year and
the first quarter of this year.
This mirrors the severe market
correction shown by a 50% decline in
the MSCI Index for the period of No-
vember 2007 to March 2009 compared
with a 40% return in the period May
2005 to November 2007.
The report also states the largest
concentration of Islamic funds remains
in the Middle East and equity funds
lead the field for choice of asset type.
An average of 19% and 23% of
Islamic funds are domiciled in Saudi
Arabia and Malaysia respectively.
Saudi Arabia holds US$19.28 bil-
lion (RM68.34 billion) in total assets
under management for Islamic funds
while Malaysia holds US$4.579 billion
(RM16.25 billion) in assets.
The untapped markets in Asia and
MENA are a source of growth for the
Islamic funds industry due to their
inherently large Muslim populations.
These markets, where Islamic
finance is still in its infancy, include
Indonesia (207 million), Pakistan (161
million), India (150 million), Bangladesh
(132 million), Turkey (71 million) and
Iran and Nigeria (both at 64 million).
The report also mentions that
commodity prices declined during the
second half of last year, but signs of
recovery in this asset class are emerg-
ing and in the first quarter of this year,
the average returns of commodity funds
stood at 10%, a substantial increase from
the -20.01% experienced last year.
Islamic cash funds remained con-
stant, providing an average return of
3.9% last year as compared with 3.4%
in 2007. In the first quarter of this year,
average returns were at 0.7%. Average
returns from real estate funds dropped
from 8% in 2007 to -11% last year and
-5% in the first quarter of this year.
Sukuk issuance has slowed as
spreads widen – sukuks worth US$15.5
billion (RM55.03 billion) were issued
last year, compared with US$47.1 bil-
lion (RM167.2 billion) in 2007.
Ernst & Young’s IFIR 2009 report
estimates that sukuks around the
value of US$27.5 billion (RM97.63 bil-
lion) will be issued this year.
Abdul Rauf Rashid, Partner, Ernst
& Young’s Islamic Finance Services
Group (IFSG) and head of Assurance
Services of Ernst & Young Malaysia
said: “Last year, we highlighted the
phenomenal rate of growth experi-
enced in the Islamic asset manage-
ment industry”.
“The landscape has changed sig-
nificantly now, yet the fundamentals
of the Islamic fund industry remain
strong. With almost US$50 billion
(RM177.5 billion) in fund assets under
management and a large, expanding
and untapped Muslim population,
there are likely to be considerable
opportunities in the future. This is a
time when strategic choices have to be
made and market participants have to
adapt to survive,” he said.
each, will boost the company’s plan for network
expansion and passengers.
“Currently, Firely operates with seven ATR 72-500
planes with each flight carrying 72 passengers,” he
told reporters after announcing the commencement
of the Kuantan-Singapore route here, yesterday.
Firefly’s maiden flight into Singapore is slated for
departure from the Sultan Ahmad Shah Airport here
on July 22.
Leong said the four times weekly flights will
further strengthen its network while focusing on
commuters for business and leisure.
“Singapore is an important hub for Firefly to tap
into. Our target market will now expand to not only
include Singaporeans but also Malaysians working
in the country, the expatriate community and transit
passengers,” he said. – Bernama
Maybank says it never sold
any Lehman product in M’sia
KUALA LUMPUR: Maybank describe the issue and measures
yesterday said it never sold any taken by banks involved,” he told
of Lehman Brothers structured a press conference here.
products in Malaysia. A New York-based global finan-
“I think the structured products cial services firm, Lehman Broth-
... most banks sold it but we did ers’ parent company, Lehman
not sell any of Lehman products in Brothers Holdings Inc, declared
Malaysia,” Maybank’s chief execu- bankruptcy in 2008.
tive officer Datuk Seri Abdul Wahid Wahid said member banks of
Omar said. the association have agreed to fol-
A report yesterday stated low the measures which cover a
that the Singapore Central Bank range of governance and assurance
fined 10 banks including Maybank processes, training and compensa-
Singapore that sold structured tion of sales personnel, consumer
products and bonds linked with education and enhancements to
Lehman Brothers. the sales process itself.
“This is actually an industry The level of proactiveness
issue in Singapore. displayed by Maybank Singapore
“The Association of Banks resulted in the bank receiving the
in Singapore had already issued lowest or shortest fine, he added.
the press statement yesterday to – Bernama