Mastercard, CrescentRating analyse travel readiness in ASEAN ahead of COVID recovery

Mastercard and CrescentRating have released their joint report on travel readiness, The Travel Readiness Report:COVID-19 in ASEAN 2020.

The report aims to better aid destinations and travel stakeholders prepare for future travel in all possible scenarios. According to Mastercard and CrescentRating, the frameworks and concepts in the report can drive strategic solutions to resuscitate travel and can also be applied to destinations outside of ASEAN.

Source: The Travel Readiness Report:COVID-19 in ASEAN 2020. Cover for the report.

"Over the last few years, April/May has been the time that we have released the Mastercard-CrescentRating Global Muslim Travel Index (GMTI). However, this year, given the current crisis, we have prioritised the release of this new Travel Readiness Report to help all stakeholders better frame the impact of COVID-19 on our industry and help build scenarios for future travel. We still do plan to release GMTI 2020 in the 4th quarter of this year," explained Fazal Bahardeen, Founder & CEO, CrescentRating.com and HalalTrip.com, in the foreword for the report.

"Our previous reports have focused on how the general industry can better cater to the Muslim travel market, and we continue to focus on this area closely. However COVID-19 has impacted everyone and created new gaps. These demanded more robust frameworks and new ways of thinking to manage the complexity and drive strategic solutions to help resuscitate travel," he added.

"According to recently-conducted Mastercard Impact Studies, confidence in travel has started rising across the world, especially in Southeast Asia. While most people have had to cancel or delay trips, these studies have shown that more than half the people across Asia Pacific are going to plan for future trips when travel restrictions have lifted. While countries have started slowly easing restrictions on movement and travel, this comes with heightened safety measures and protocols in place that were never there before. While the travel sector is gearing up for these measures, they need to ensure that they are prepared to meet the new needs of customers," observed Safdar Khan, Division President Southeast Asia Emerging Markets, Mastercard, in the same foreword.

"As we all prepare for a new normal, there is a need for reliable data insights that can help sectors plan and future-proof their businesses. 2020 is our sixth year partnering with CrescentRating to develop in-depth reports that serve as a beacon for businesses and governments who are looking to bolster their travel offerings and bring memorable experiences to their end-customers. We trust this report can help the tourism industry craft strategies that will make them more digital, resilient, agile, and flexible to changing consumer needs, and successfully navigate the difficult—but not insurmountable—challenges of the future," he said.

The two companies note that tourism has been a key economic and GDP contributor in ASEAN, and a source of revenue for many small businesses, but this has changed since the COVID-19 pandemic hit. They believe that even after restrictions on movement and travel are lifted, heightened safety measures and protocols will be implemented by all nations.

The need to better understand the trends and how the tourism industry can prepare for the new world and the inevitable change in consumer needs was the impetus for the research.

Based on expert analysis and data from leading organisations, The Travel Readiness Report by Mastercard and CrescentRating offers players and stakeholders in the travel and tourism sector in-depth insights into various areas - from how COVID-19 has affected household finances in the region, to mapping out different recovery trajectories, to providing concrete courses of action for businesses in the tourism industry to move forward with greater confidence.

The report also provides insights for destinations to plan their COVID-19 recovery roadmap along four key phases: Containment, Recovery, Normalization and Growth.

In a segment on Muslim travellers in ASEAN, the report profiled three Muslim traveller categories and how they have been impacted by COVID-19: Muslim Millennials, Muslim Gen Zers, and Muslim women travellers.

Defined as those born between 1981 to 1994, Muslim Millennial travellers (MMTs) are are dealing with career progression and starting a family while their employees adjust work arrangements and cut salaries in order to retain jobs. "Travel is no longer accessible, and the availability of authentic experiences is questionable in the near future. Thus, MMTs are forced to prioritise economic stability over trip planning," the report said.


Defined as those born between 1995 to 2009, Gen Zers are also affected badly when it comes to travel, the report added.

Women travellers are hard-hit when the ailing travel and tourism industry is woman-dominated. The COVID-19 fallout has meant that more women are either being displaced or are facing wage-cuts during the pandemic, and their wages are usually lower than men's in the first place.

"Additionally, gender roles and expectations render women to be responsible of household affairs. Thus, the potential of Muslim women travellers to explore and energise communities is severed during the pandemic," the report said.
 
The report further noted that such travellers represent 21% of the domestic tourist and 43% of the intra-ASEAN travellers, due to the large Muslim travel outbound markets from Indonesia and Malaysia travelling to neighbouring destinations. Outbound travellers leave their home country to travel to other countries.

"With its strength as one of most Muslim travel-friendly regions in the world, ASEAN could benefit from this segment of travellers as intra-regional travel opens up," the report said.

Report authors further noted that Malaysia and Indonesia are ranked a joint first in last year's Mastercard-Crescentrating Global Muslim Travel Index (GMTI) 2019. ASEAN countries Brunei and Singapore along with Malaysia and Indonesia occupy four of the top 10 ranked destinations in the GMTI.

"This strength allows ASEAN destinations to position strongly to attract the Muslim market as travel opens," the report concluded.
Details:

Read the report (PDF).

Hashtags: #AseanTravel, #TravelReadinessASEAN

WIEF focuses on entrepreneurship and emerging spaces with IdeaLab 2017

The World Islamic Economic Forum (WIEF) Young Leaders Network (WYN) has concluded the third edition of WIEF IdeaLab 2017. This two-day conference aims to strengthen the ASEAN startup ecosystem and attracted close to 400 participants from 35 countries.

“As the rising centre of the global economy, the ASEAN region boasts myriad opportunities; especially for startups and entrepreneurs. With innovation and entrepreneurship being a key agenda in many countries throughout the region including Malaysia, it is only inevitable that startups are increasingly looked to as key drivers of socioeconomic and market transformation in the region,” said Ebrahim Patel, Chairman of the WIEF Young Leaders Network.

According to Patel, global venture capitalists continue to seek investment opportunities in the ASEAN startup ecosystem due to the available talent pool and rapid growth potential.

“We bring together global venture capital firms and angel investors looking at investing in seed to post-seed stage companies. This also includes startups in the ideation stage across ASEAN. By doing so, WIEF IdeaLab 2017 is a prime example of the type of values that the WIEF Foundation and its associated programmes bring to its various participants,” said Patel.

At the IdeaLab Pitch session this year, 31 ASEAN startups presented their ideas to global venture capitalists; after which 10 startups were shortlisted for the final pitch session. Moneybay, Zap Zap Math, CheQQme, Glueck, BolehCompare and Moovby received expressions of interest.

WIEF IdeaLab 2017 featured signature events including:

Ideation Stage, where topics relevant to the startup scene in ASEAN were discussed by industry leaders;

Networking Pods, an online to offline platform in designated areas for setting up casual conversations between participants during the event;

IdeaClinic, where startups received real-time advice on matters such as legal, public relations, and marketing;

Business Anonymous, breakout rooms where ASEAN startups are given the opportunity to share their experiences living the startup life;

Startup Ecosystem Fair, showcasing the offerings of major players in the Malaysian startup ecosystem as well as startups from other parts of the region; and

The IdeaLab Pitch where startups and corporations pitch their ideas, either to seek investments or industry solutions.

“With the ASEAN Economic Community (AEC) quickly approaching its 2025 milestone, there is now an accelerated focus on e-commerce and digital economy – potentially worth up to US$200 billion over the next 10 years in the region. The WIEF IdeaLab as a platform corresponds with the Entrepreneurship and emerging Spaces industry growth vector. This represents the ideals that we at the WIEF stand for,” said Tan Sri Fuzi, Secretary-General of the WIEF Foundation.

Source: WIEF IdeaLab. Source: WIEF IdeaLab. Ebrahim Patel (centre) with the top 10 startups and participating global venture capitalists after the final IdeaLab pitch.

The WIEF IdeaLab 2017 is one of a series of key events organised in the lead-up to the 13th WIEF, which will be held from 21-23 November at the Borneo Convention Centre, in Kuching, Sarawak, Malaysia. Leading with the theme Disruptive Change: Impact and Challenges, this event also focuses on startups.

The WIEF Foundation, a not-for-profit organisation based in Kuala Lumpur, Malaysia, organises the annual WIEF, a business platform showcasing business opportunities in the Muslim world, and runs programmes of the various initiatives of the foundation that strengthen people partnership and knowledge exchange between Muslim and non-Muslim communities across the globe.

The 13th WIEF consists of panel discussions, masterclasses, an Initiative Room, exhibition, business exchange and the IdeaPad, a platform for innovative ideas and businesses, in addition to smaller complementary programmes. The Initiative Room consists of group sessions with the aim of getting participants involved actively in the outcomes of the forum. With the aid of a professional facilitator, participants think of innovative solutions that can become actionable initiatives.

The WIEF has previously held forums in Malaysia, Kazakhstan, Indonesia, Kuwait, Pakistan, the UK and UAE.

WIEF IdeaLab 2017 is in line with one of the five industry growth vectors which will be discussed at the 13th WIEF this year - entrepreneurship and emerging spaces. The other vectors are disruptive science, technology and innovation, halal consumables and services, Islamic finance and law, and arts, culture and design:

Disruptive science, technology and innovation 

Disruptive technological advancements are increasingly transforming our daily lives, creating new opportunities and reshaping traditional industries. Disruptive changes in the form of artificial intelligence (AI), Blockchain, the Internet of Things (IoT) and other medical and manufacturing technologies, continue to radically alter how we do things, how leadership is perceived, how businesses are run and how manpower is organised. The challenge for businesses lies in developing concrete and sustainable innovation and technology collaboration opportunities to help bridge this gap, and to enable countries at all levels of development to take advantage of available technologies and develop a robust culture of innovation.

Robust market opportunities exist in Asia. For example, the Asian fintech accounted for US$4.5 billion in investments in 2016*, and AI is to create economic value between US$1.8 trillion and US$3 trillion a year by 2030 in Asia**.

Halal consumables and services 

According to the WIEF organisers we are witnessing a gradual shift towards halal products and services – be it fashion, fragrance, cosmetics, personal care products or travel, tourism and hospitality. The increasing demand for ethical, sustainable, environmentally - and socially - responsible goods and services is also a driving factor for the growth of the halal market and one of the main reasons for its growing acceptance by non-Muslim consumers*. The sector is growing at 8% year-on-year , with an estimated value of US$2.3 trillion, higher than the GDP of more than 200 countries in the world. The halal food and beverage (F&B) industry is worth US$1.4 trillion***.

Islamic finance and law 

Since the 2008 financial crisis, income inequality across the globe has risen sharply, with the global economy moving significantly from asset-based economic transactions to an increasingly speculative financial one, resulting in weaker domestic economies and a fragile financial system. Alternative paradigms of finance and law are currently being explored as opportunities areas.

The Islamic finance industry will continue to expand this year, but lose some momentum in 2018*****. The industry's assets reached US$2 trillion at end-2016 on the acceleration of sukuk issuance. The sector is driven by an expanding, young Muslim population, which is expected to reach 2.2 billion in 2030, up from 1.7 billion in 2014******.

Entrepreneurship and emerging spaces

Small and medium-sized enterprises (SMEs) have played a vital role in Asia's development. Indeed, SMEs in more developed Asian economies have continued to take advantage of technological progress to grow and become the mainstay of the manufacturing sector. Micro SMEs (MSMEs) represent around 90% of global economic activity as well as 45% of total employment; the sector contribution to Malaysia’s GDP is expected to exceed 40% and on track to achieve the target of 41% of the GDP*******.

Arts, culture and design 

The arts, culture and design sector (heritage, arts, media, and functional creations) makes a vital contribution to jobs and the economy as creativity generates higher value and is more resistant to automation. The sector generated US$2.25 billion in revenue (3% of global GDP) with the highest earners being television (US$477 billion), newspapers and magazines (US$354 billion) and visual arts (US$391 billion)******** and generated 29.5 million jobs (about 1% of the world’s active population).

Potential growth drivers for the sector in ASEAN include:

- ASEAN integration
- High youth population
- High technology penetration
- High cultural diversity

*It should be noted that non-Muslim consumers are not seeking out halal products per se but are seeking products which happen to be in agreement with various tenets of halal requirements, such as products that are not tested on animals.

*Fintech growth accelerates in Asia with record $4.5 billion investments 

**How artificial intelligence will transform Asia, Shifting Asia: Artificial intelligence, UBS Asia, April 2017 

***Global halal industry grows 8pc to hit $2.3 trillion

****Doing Business in the Halal Market (PDF) 

*****Islamic finance sector set to lose growth momentum in 2018 

******State of the Global Islamic Economy Report 2016-17 (PDF) 

*******Malaysia’s SME GDP contribution to exceed 40%

********The First Global Map of Cultural and Creative Industries
 
posted from Bloggeroid

Singapore represented at ASEAN Quran recital competition

The Islamic Religious Council of Singapore (Muis) has sent representatives to participate in a Quran memorisation and recital competition in Malaysia. Ustazah Nurul ‘Izzah Binte Khamsani and Ustaz Syarafuddeen Bin Mazlan Abdullah will be representing Singapore in the ASEAN Al-Quran Recital Competition.

posted from Bloggeroid

IdeaLab 2016 to give ASEAN startups a boost

IdeaLab 2016 is a two-day boutique startup conference focusing on ASEAN startup cross-border linkages, and the Malaysian startup ecosystem, and includes the Malaysian Business Angels Network (MBAN) Summit (All About Angels) for investors worldwide. According to the organisers, 500 of the best startups, investors and corporates in the ASEAN ecosystem have been targeted.

Delegates can attend the Ideation Stage, where industry leaders will discuss pressing issues for startups in ASEAN; the IdeaPad Stage where the best ASEAN startups battle it out in front of a panel of judges; and the IdeaClinic, where startups get real-time advice on legal, public relations and marketing issues.

In Startups Anonymous; breakout rooms allow ASEAN startups to share their challenges and experiences, while Networking Pods offer an online-to-offline platform for setting up discussions between participants during the event. The MBAN Summit (All About Angels) will introduce traditional investors to the startup ecosystem, whereas the Startup Ecosystem Fair will showcase the major players in the Malaysian startup ecosystem and some of the best startups in the ASEAN region.

The event is part of Malaysian Entrepreneurship Week, from 31 October to 3 November, a collaboration between the Malaysian Global Innovation and Creativity Centre (MaGIC), the WIEF Foundation, MBAN, the Malaysian Ministry of Science, Technology and Innovation (MOSTI) and the Global Startup Awards.

The week begins with IdeaLab and the MBAN Summit from 31 October to 1 November at Berjaya Times Square Hotel in Kuala Lumpur, Malaysia, followed by the Global Entrepreneurship Community (GEC) hosted by MaGIC on 2 to 3 November at the Kuala Lumpur Convention Centre, focusing on creating a collaborative platform for entrepreneurial innovation between the major and micro ecosystem builders in the global startup space. The MOSTI Commercialisation Year conference will run parallel to the GEC. The Global Startup Award ceremony will be held on 3 November.

Labuan IBFC begins ASEAN roadshows with session on shari'ah-compliant solutions

Labuan International Business and Financial Centre (Labuan IBFC), Asia Pacific’s midshore international business and financial centre, has launched a series of roadshows across ASEAN.

The Labuan IBFC ASEAN Roadshow 2016 will visit key countries in ASEAN and, for the first time will include events as well as closed door briefings in the emerging economies of Cambodia, Laos, Vietnam and Myanmar. The roadshows have kicked off in Jakarta, Indonesia, will continue through till end-July.

“Our approach to the roadshow this year is distinct as we are targeting business owners in the region looking to internationalise or even regionalise their businesses. We believe that with as businesses embrace higher tax transparency requirements, it would be natural for them to consider to establishing substance in a well-regulated jurisdiction facilitate cross border transactions and investments.” said Danial Mah Abdullah, Chief Executive Officer, Labuan IBFC.

He went on to state that the roadshow will also focus in meeting the wealth management needs in the region, adding that as ASEAN has a large Muslim population, the Jakarta chapter of the roadshow focuses on shari'ah-compliant wealth management solutions.

Themed Innovative Solutions towards Islamic Wealth Management the kickoff masterclass was aimed at Indonesian service providers, intermediaries and high net worth individuals who are looking to better understand shari'ah-compliant wealth management offerings, wealth preservation and succession planning solutions.

Mah, who is also the Deputy Director General of Labuan FSA, said, “What makes Labuan IBFC different is that it was established with the main aim of intermediating crossborder trade and investments in the region. The expectations are that intra-Asia and ASEAN trade and investments will grow, and there is a need for a well-regulated jurisdiction in the region able to facilitate these trades and investments. ”

The masterclass included a presentation on the Labuan International Waqf Foundation, a shari'ah-compliant wealth management tool, which incorporates the element of waqf* (وقف‎) in its structure.

Labuan IBFC is the only jurisdiction in the region offering foundation structures including Islamic foundations with waqf elements built in.

The event also included a panel session titled Opportunity and Challenges: Islamic Wealth Management in Asia with Dr Aida Othman, Director at ZICO Law Shariah Advisory Services, Maikel Sajangbati, CEO and Founder of MaeSa Consulting Indonesia as well as Aderi Adnan, Business Development Director of Labuan IBFC.

The panel focused on the new Islamic wealth management environment in light of more stringent global regulatory requirements, evolving Islamic wealth management strategies amidst changing family legacy mindsets, experiences and cultural differences in Asia.

Interested?

View event details


*Waqf refers to a donation made for a religious, educational or charitable cause.

posted from Bloggeroid

Philippines AirAsia offers delectable new deal with Santan inflight menu concept

Source: AirAsia. Santan is Philippines AirAsia's new
inflight menu concept.

Philippines AirAsia has begun serving hot meals from its newest inflight menu concept, themed Santan. Halal-certified Santan replaces AirAsia Café as part of the airline’s latest offerings to enhance customer experience while flying. The name refers to an essential ingredient in Malay cooking, the liquid obtained from pressing shredded coconut meat. Santan is thick, creamy and often use as a substitute for butter, cream or soup stock in ASEAN cooking.

New items include bangus sisig, a Filipino dish made of chunks of boneless milkfish sautéed in onions seasoned with salt, pepper and spices; buffalo chicken strips and barbeque cola beef, grilled meat with smoky sauce paired with tomato rice or roasted potatoes; and the low-calorie vegetarian chickpea curry and classic Maan’s pasta arabiata. The dishes are available for onboard and prebooked purchases on all Philippines AirAsia flights to/from Manila, Kalibo/Boracay, Palawan, Bohol, Cebu, Davao, Malaysia, Hong Kong, Macau and South Korea.

Other dishes on the menu also pay tribute to ASEAN flavours. These include nasi lemak, chicken rice, beef caldereta and adobo. Guests can also choose from sweets such as lemon torte, banoffee cake, sinful chocolate cake and chocolate chip cookies from as low as P80 for onboard purchase.

Philippines AirAsia Commercial Head, Gerard Peñaflor said, “We value customer experience at all points of the journey – from the purchase of the ticket to leaving the airport, on board, and onto the destination. This latest enhancement in our inflight menu makes flying with us also a delightful dining experience.”

Interested?

AirAsia guests are encouraged to prebook their meals to save up to 20% as compared to purchasing their meals on board, with a guarantee that their preferred meals are available during their flights. Guests who have booked their flights without meals, meanwhile, can easily add them in via the ‘Manage My Booking’ option after logging in to www.airasia.com.

Malaysia's prime minister calls for more focus on the 'ASEAN way'

Source: ASEAN Secretariat.

In his opening address at the 27th ASEAN Summit and related summits in Kuala Lumpur, Malaysia, YAB Dato' Sri Mohd Najib Tun Abdul Razak, the Prime Minister (PM) of Malaysia, distanced ASEAN from recent terrorist acts around the world, including attacks in Paris, Beirut and Mali, the bombing of a Russian passenger jet over the Sinai desert, and a Malaysian beheaded in the Philippines.

"The perpetrators of these cowardly and barbaric acts do not represent any race, religion or creed, nor should we allow them to claim to do so. They are terrorists and should be confronted as such, with the full force of the law," said PM Najib. "Malaysia stands ready to provide any help and support that we can, and be assured that we stand with you against this new evil that blasphemes against the name of Islam."

The PM went on to call for moderation, which he pointed out is also the 'ASEAN way'. "We have stressed community and consensus-building, over the excesses of individualism and the seeking of selfish objectives. Non-violence over confrontation. Moderation over extremism. Showing respect, not just to our friends but also to our foes, for we know there is no virtue in humiliation. Peaceseeking and peace-building, instead of fanning the flames of conflict and war," he said.

The ASEAN way has already led to numerous benefits, including a combined GDP of US$2.6 trillion last year, a near 80% increase in seven years. On the economic front, the ASEAN Free Trade Area, or AFTA, has reduced tariffs to zero or near zero, PM Najib pointed out. "This has reduced the prices of countless goods, and means our citizens have more money to spend on their families. Without AFTA, our firms would find it harder to access each others’ markets," he said.

Unemployment would be higher without ASEAN, he added. "The overall rate among our ten nations is a comparatively low 3.3% – which economists attribute not just to countries, but to ASEAN attracting substantial flows of foreign direct investment," he said.

ASEAN has also allowed visa-free travel through nine out of ten member states.

A number of developments were announced in conjunction with the event to promote the ASEAN way, including:

The declaration of the formal establishment of the ASEAN Community on 31 December 2015. "..it is estimated that the measures we are implementing under the ASEAN Economic Community will raise overall GDP in ASEAN by 7% by 2025. That will be a gain for our economies in the hundreds of billions," the PM said.

Ten individuals and organisations honoured for their community-building efforts at the inaugural ASEAN People’s Awards.

The 1ASEAN Entrepreneurship Summit, a week-long assembly of 15,000 young entrepreneurs from all over ASEAN, ended November 22.

The establishment of the ASEAN Micro and SME Growth Accelerator Exchange for SME finance.

The signing of the ASEAN Convention Against Trafficking in Persons, Especially Women and Children. 

The signing of the Kuala Lumpur Declaration on ASEAN 2025: Forging Ahead Together, which incorporates the ASEAN Community Vision.

Earlier this year Malaysia also launched GOASEAN TV, a new English-language, ASEAN-focused travel channel that will serve as a platform for ASEAN member countries to jointly promote tourism in ASEAN, PM Najib added.

Going forward, the PM called for some 'low hanging fruit' to be implemented, including: special lanes for ASEAN citizens at every international port, road and airport, prioritisation of the launch of the ASEAN Business Travel Card, and strengthened ASEAN internship programmes, saying that ASEAN needs to "act more as ASEAN within our region".

"We need that single market and production base we talk about. We need the free movement of goods, services, skilled labour, capital and investments. At the moment non-tariff barriers, which affect daily life and employment across our nations, are too extensive... We need to cooperate to find solutions to environmental problems such as the haze, natural disasters including floods and earthquakes, and crises of migration," he said.

On the international level, ASEAN should be viewed as a force to be respected that is stronger than its member nations, he noted. "That includes maintaining peace, security and stability in the South China Sea. We stress the importance of resolving disputes through peaceful means, in accordance with international law including the United Nations Convention on the Law of the Sea. We call on all parties to exercise self-restraint, and avoid actions that would complicate or escalate tension," he said. "That is the ASEAN way."

PM Najib concluded his speech with the call to refer ASEAN as the ASEAN Community in future. "ASEAN can and should play a major role in shaping this Asian century, and work with our partners across the continents to shape a world of prosperity, peace and openness. A world in which the carnage wrought by terrorists has been replaced by tolerance, moderation and a true recognition of our common humanity," he said.

Push to harmonise halal standards in ASEAN

The Department of Standards Malaysia is initiating the establishment of a Working Group on Halal Products and Services with its counterparts in Indonesia and Thailand to harmonise halal standards within the ASEAN region. 

Source: WHS website.

The taskforce will facilitate a platform for discussion amongst halal authorities with the aim of providing a framework to support economic cooperation and integration within member countries.

While acknowledging existing issues among halal authorities to consensually agree on a unified standard, Standards Malaysia Director General Datuk Fadilah Baharin said that member countries must start acknowledging the importance of a common regional halal standard in preparation for the establishment of a single international standardisation body.

A new landscape within the halal industry is expected to take place should a uniform halal standard using ISO methodology be successfully implemented by Dubai-led Standards and Metrology Institute for Islamic Countries, SMIIC. SMIIC is an affiliate body of the Organisation of Islamic Cooperation (OIC) established in 2010 with the main objectives to prepare an OIC/SMIIC Halal standard to achieve uniformity in metrology, laboratory, testing and standardisation. A total of 31 member states out of the 56 OIC Islamic states are currently members, with Bosnia-Herzegovina and Malaysia being the latest to join since November last year.

“Differences (in opinion) can have detrimental effects on competition and international trade. With a view to harmonise conformity assessment procedures, member countries shall play a full part within the limits of their resources and as a basis for their technical regulations,” she said during the Certifiers Forum at the World Halal Summit (WHS) 2015.

The main challenge faced by the global halal industry is the lack of one unified standard on what exactly is halal. There are between 500 and 3,000 certification agencies around the world, of which 80% are from non-Muslim countries. The lack of a unified standard has also raised production costs for exporting companies, as they must follow different national regulatory standards.

Fadilah said a unified standard among ASEAN countries could address these challenges and help minimise the export cost for halal products.

“Standards, technical regulations and procedures for determining conformity are essential to ensure consumer safety, increase transparency of product information and compatibility of products,” she said.

“A unified halal system will result in a mutual recognition of certificates through a recognised accreditation, reassure customer’s trust and diminish technical barriers to trade with mutual recognition,” said Farah Al Zarooni, Director of Accreditation Department, ESMA in Dubai.

“The uniformity of halal standards developed by SMIIC, which is an intergovernmental institution, will pave the way for better economic relations within the industry. We want to promote one standard and one test that are recognised throughout the globe.”

Further insights about the complexities of halal standardisation were shared during other sessions at the WHS. Ironically, 85% of products and raw materials produced today come from non-Muslim countries where halal accreditation processes are actually more advanced than that of the Muslim countries.

“In most cases, halal integrity within the supply chain cannot be verified throughout the entire system,” said Salih Yuksel, SMIIC AC Chair and Acting Head, System Accreditation Department, Turkish Accreditation Agency (TURKAK) during the Certifiers Forum. “There is certainly a demand and dire need to address this weak point within the halal certification bodies.”

Among the common oversights by halal certification bodies are the lack of transparency and competency. The fact that there are more than a thousand halal accreditation bodies worldwide that are not following any specific halal procedure is a telling sign, it was mentioned.

Acknowledging that the discrepancies in Islamic knowledge and practices are most likely the reasons for the impartiality, Salih said the industry must remain focused in moving forward regardless of the differences.

At the fourth session of the Academics Forum at the WHS Dr Sharifudin Mhd Shaarani, Dean, School of Food Science & Nutrition, University of Malaysia Sabah, noted that halal food science is akin to forensics. “In this era, the development of alternative food ingredients and Genetically-Modified Organisms (GMO) make the area very complex,” said Dr Sharifudin. 

"Another short- term remedy we need is a halal quality assurance that ensures that every time we produce a halal product, it is truly halal. To invest time and money into doing this is relatively less expensive and (will) bring us forward (faster)."

Associate Professor Dzulkifly Mat Hashim, Former Head of Halal Services Laboratory, Halal Products Research Institute, UPM Malaysia, said practicality had to be part of the equation. “We need academicians, players of the industry and the regulators to work together to solve real issues that are presented, for example, the permitted level of alcohol in a food or ingredient,” he said.

Southeast Asia is home to more than 250 million halal consumers, and countries like Malaysia, Indonesia and Singapore have had regulations to control the import of halal-certified products for years.
With more than 60% of its population being Muslims, Malaysia exported a total of RM10 billion worth of halal products last year.

Amir Sakic, Bosnia and Herzegovina’s Director of Halal Quality Certification Agency pointed out that the main goal of halal standard is to remove barriers of international trade, provide a better understanding of halal and minimise costs of doing business.

“European countries are also trying to harmonise standards for all its 27 member countries,” he said.

In closing remarks for the event Grand Mufti Emeritus of Bosnia and Herzegovina, Dr Mustafa Ceric said the focus should move from labelling to making halal products more attractive. “I always wonder what makes haram sweet. Turn that around and produce products in halal that are sweet, nice and attractive that will make people stop looking at the temptations in haram,” he said.

“We need to move away in trying to explain halal in religious terms but (to stress on) the fact that halal is good, healthy and clean. Do people buy Chanel because it is French? No. People buy Chanel because it is good,” he said to applause.

“Of course Halal is religion. We all know that. You don’t need to attend a three-day conference to tell you that. But too much emphasis on it (from a religious perspective) will be counterproductive. Don’t make simple things complicated or complicate simple things,” Dr Mustafa concluded.

The world Muslim population is expected to account for 30% of the world’s population by 2025. The global market value for trade in halal food is estimated at US$547 billion a year and analysts predicted the value to reach US$10 trillion by 2030.
Among the driving factors include a steady growth of Muslim population worldwide; rising incomes in primary markets for halal products, and increasing demand for safe, high quality halal food. Currently, the global halal product market is estimated at US$2.3 trillion, excluding Islamic finance.

The inaugural WHS in Kuala Lumpur builds on the foundation established by the Malaysian government’s decades-long commitment to develop the halal industry to its full potential, not just among the estimated 1.8 billion Muslims worldwide currently but also among the world’s non-Muslims.

The WHS 2015 is designed as a platform to provide opportunities for halal-industry stakeholders to collaborate, network, discuss and present viable ideas for the expansion and promotion of the industry, as well as to overcome the challenges it faces. The event also seeks to play the role of catalyst to introduce new structures and regulatory frameworks to increase confidence amongst consumers, industry players and investors for the halal economy.

The event concept integrates the halal trade fair MIHAS (Malaysia International Halal Showcase), and six other conferences and forums: the 8th World Halal Conference (WHC), the 6th JAKIM International Halal Certification Bodies Convention, the Certifiers Forum, Scholars Forum, Academics Forum and the Business Forum.

The star component of WHS, MIHAS, has hosted approximately 170,000 visitors from 70 nations, 4,000 companies from 48 countries, and generated more than US$3 billion in sales over the past 11 years.

Apart from the obvious economic potential, Malaysia also views the promotion of the global halal economy as an important component of the Global Movement of Moderates, an idea articulated by the Prime Minister of Malaysia, YAB Dato’ Seri Najib Tun Haji Abdul Razak, with the main goal of applying perspectives and frameworks of moderation to realise world peace and harmony.

A collaborative effort under the patronage of the Ministry of International Trade and Industry (MITI), the WHS 2015 is organised with the coordination of the Malaysia External Trade Development Corporation (MATRADE), Halal Industry Development Corporation (HDC) and Department of Islamic Development Malaysia (JAKIM).

posted from Bloggeroid

CIMB Investment Bank is joint lead manager for 10 times-oversubscribed UK sukuk

CIMB Investment Bank has announced that it was the only ASEAN bank to be involved in the first sukuk offering by a sovereign outside the Islamic world. 

The bank acted as the joint lead manager and bookrunner for the GBP200 million sukuk offering by HM Treasury UK Sovereign Sukuk, a special purpose vehicle wholly-owned by Her Majesty’s Treasury.

The sukuk were priced on 25 June at 2.036%, representing a spread of 0 basis points (bps) relative to the yield on the 1¾% treasury gilt 2019, with the price set at GBP100. The deal was oversubscribed by more than ten times, attracting interest in excess of over GBP2 billion.

"The appointment not only recognises our expertise in Islamic finance but it is also a great testament to the stature of the investment banking franchise that we have built and our strong distribution capability in the region and beyond,” said Dato’ Sri Nazir Razak, Group Chief Executive, CIMB Group.

Chancellor of the Exchequer, George Osborne, said, “The issuance of Britain’s first sovereign sukuk delivers on the government’s commitment to become the western hub of Islamic finance and is part of our long term economic plan to make Britain the undisputed centre of the global financial system. We have seen very strong demand for the sukuk, resulting in a price that delivers good value for money for the taxpayer. I hope that the success of this government issuance will encourage further private sector issuances of sukuk in the UK.”

The deal attracted interest from a diverse group of domestic and international investors. The allocation was well-spread out globally, with 39% of the sukuk distributed to investors in the UK, the Middle East 37% and Asia 24%.

The deal was priced after a comprehensive roadshow across key global Islamic financial centres: Jeddah, Riyadh, Dubai, Abu Dhabi, Doha, Kuala Lumpur and London. The other syndicate banks for this transaction are Barwa Bank, HSBC, National Bank of Abu Dhabi and Standard Chartered Bank.

CIMB has been involved in a number of notable sukuk issuance transactions including multiple Government of Malaysia and Republic of Indonesia's trust certificates, Export-Import Bank of Malaysia's multicurrency sukuk programme, multiple tranches of Islamic Development Bank's trust certificates programmes since 2005, Sabana REIT – the world's first shari'ah-compliant industrial REIT’s trust certificates, and multiple Khazanah Nasional’s exchangeable sukuk.

Fund focus: Saturna's ASEAN Equity Fund is shari'ah compliant with performance-based fees

Saturna, a wholly-owned subsidiary of US-based Saturna Capital Corporation and a licensed Islamic fund manager under the Malaysia International Islamic Financial Centre (MIFC), launched the ASEAN Equity Fund in February to capitalise on the expected growth resulting from further economic integration within the ASEAN region. As of May 9, it trades at a little over RM1 per share.

Saturna has established itself as an expert in Islamic funds. It acts as a sub-adviser to the Crescent International Equity Fund, managed by Crescent Wealth, Australia's first Islamic wealth manager. Saturna Capital is adviser to the Amana Mutual Funds (Amana Growth Fund, Amana Income Fund, and Amana Developing World Fund) that follow principles of Islamic finance. 
 
The ASEAN Equity Fund invests in a diversified portfolio of shari'ah-compliant equities across the ASEAN region using a values-based investment approach developed by Saturna Capital's Chief Investment Officer Nicholas Kaiser. The criteria for stock selection will include identifying companies with improving fundamentals and growth at reasonable valuations.  

At least 70% of the Fund's net asset value (NAV) is in shari'ah-compliant equities in ASEAN countries, and up to 30% of the dund's NAV is in liquid assets including money market instruments and deposits with Islamic financial institutions.

According to Saturna, the ASEAN Equity Fund has a low-fee structure designed to be fair, transparent, and aligned with the long-term interests of unit holders. The Fund is offered with no sales charge, low administrative fees and transparent distribution fees. Additionally, the management fee of the Fund is performance-based - the management receives no fee unless the fund makes money for its investors. 

Monem Salam, Saturna ASEAN Equity Fund Portfolio Manager and President of Saturna in Malaysia, commented at the time of the launch: "We believe the ASEAN Equity Fund will first and foremost fill a gap for high-net-worth and institutional Islamic investors in and outside Malaysia. It could also serve as a low-cost vehicle for qualified non-Muslim investors who want to access investment opportunities in the rapidly growing ASEAN markets. An additional attraction for all qualified investors will be the Fund's performance-based fee structure, which, in line with shari'ah practices, makes sure that the management makes money only if investors do." 

The fund, denominated in Malaysian ringgit, is available to domestic and foreign qualified high-net-worth individuals and institutional investors. Click here for more information about the fund.