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Friday, 4 December 2009

Asian Finance Bank eyes Islamic fundraising in Brunei

ASIAN FINANCE BANK (AFB) is looking into the possibility of establishing a representative office in Brunei Darussalam by 2010, its chief executive based in Malaysia told The Brunei Times by phone yesterday.

AFB hopes to work with Islamic banks in the Sultanate to develop and specialise in fundraising facilities for the shipping of oil and gas, aviation and environment projects, as well as in establishing sovereign funds, said Datuk Mohamed Azahari Kamil, the Islamic bank's CEO.

"There is so much development of oil and gas in Brunei, hence there is a demand for shipping vessels and bunkering services. The fund, named Safeena, is to raise money from the general public to finance vessels which will be acquired by oil and gas companies for a long-term contract of 10 years and is expected to achieve a net return of 10 per cent yield per annum," Datuk Mohamed Azahari said.

The bank also sees the possibility of raising funds to finance investments in the aviation sector, including the purchase of commercial aircraft.

AFB's green fund will raise money for carbon credit, for example, manufacturing of solar panels, as it is important for the development of "green" projects in Brunei.

Datuk Mohamed Azahari said by the end of 2010, the bank will be able to see a clear direction of its planned presence in the Sultanate but its entry and activities here are subject to the relevant authorities' approval, feasibility studies and other factors.

Even though Brunei's market is small, its sovereign wealth is huge, making it attractive to the bank.

"We hope to work with government-linked agencies like the Brunei Investment Agency ," said Datuk Mohamed Azahari. "Besides Brunei, we are also looking to Indonesia, Singapore and other parts of Malaysia," he said.

AFB said in a statement the Safeena Fund is structured as a syariah-compliant 10-year closed-end fund constituted via an incorporated entity namely Safeena (L) Ltd domiciled in the tax haven of Labuan.

"The Fund is a private fund and is to be offered only to select sophisticated investors. It aims at raising US$300,00,000 ($41 million) through equity and debt participation to invest in structures and/or acquire a portfolio of good quality yielding vessels that will provide a stable income stream to investors. The Fund is jointly managed by AFB and AmanahRaya Investment Limited," the bank said.

It stated that the Safeena Fund successfully completed its first investment on November 26 this year through "istisna" (construction contract) and "ijarah mawsufah fi dzimmah" (forward lease) with Jimbaran AS, a Norwegian entity that owns and manages chemical tankers. The bank is one of the three foreign Islamic banks that has been granted a licence by Malaysia's central bank to undertake Islamic banking business.

AFB is a full-fledged Islamic bank incorporated in November 2005 and backed by a consortium of shareholders from leading Middle Eastern financial institutions: Qatar Islamic Bank and associates, RUSD Investment Bank Inc of Saudi Arabia and Financial Assets Bahrain WLL

(Fri, Dec 04, 2009 /The Brunei Times/Asia News Network)

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Alfalah Consulting - KL: www.alfalahconsulting.com 
Islamic finance consultant: www.ahmad-sanusi-husain.com 
Islamic Investment Malaysia: www.islamic-invest-malaysia.com 

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