Perak Saga

DPM Najib says BN has the majority to form a new Perak state government.

The BN must be so desparate for power. Do they actually believe a minority government supported by "friendly" independants can survive the rough and tumble of the State Assembly? Also, let's assume that the graft charges are not dropped and the two ex PKR assemblymen are convicted of corruption,* what will happen to the BN state government?

BN needs to restore their credibility and the rakyat's faith in them. I don't think it can be achieved by accepting party hoppers, especially those who are under trial for corruption. It is like saying "BN will work with anyone including those under investigation, just to gain power". BN once abhors party hopping but now thay are taking advantage of it. If BN wants to regain the people's support, they should put the money where their mouth is and challenge PR to another round of elections.

I hope the Sultan will agree on a snap election,** let the people of Perak decide again who they want as their government. The losers of that election should gracefully accept defeat, buck up and try again in 2012.

* IMHO this is highly unlikely.

** HRH Sultan of Perak decided that there was no need to call for a snap election (5 Feb 2009)

Back to the Darkside?

February 04, 2009 16:07 PM
Perak MB Announces State Assembly Dissolved, To Seek Palace Consent

IPOH, Feb 4 (Bernama) -- Perak Menteri Besar Datuk Seri Mohamad Nizar Jamaluddin today in a drastic and an unprecedented move announced an immediate dissolution of the state assembly following political uncertainty in the state. He told a press conference in Ipoh that he is seeking an audience with the Sultan of Perak to obtain his consent.-- BERNAMA

From http://www.thestar.com.my/ - Newsflash (4:30pm): Behrang assemblyman Jamaluddin Mohd Radzi, Changkat Jering assemblyman Mohd Osman Mohd Jailu, DAP's Jelapang assemblyman and Perak state assembly deputy speaker Hee Yit Foong and Bota assemblyman Datuk Nasaruddin Hashim spotted at the office of Deputy Prime Minister Datuk Seri Najib Tun Razak.

So it has come to this. apparently the Bota ADUN who joined PKR a few days ago is back in UMNO's fold. According to MStar, his wife said two unknown men came to pick him up and the next thing we know he's back in UMNO.

As an almost neutral, I'm disappointed at how things have turned out. I feel that if an assemblyman or MP is dissatisfied/disagrees with the government's policies, he/she should quit and if he/she still wishes to be in Parliament, seek re-election via the electoral process.* I am against party hopping, a party-hopper shows no integrity nor credibility and in my humble opinion, we do not need such people to represent us.

• If it is true that the Bota assemblyman has rejoined UMNO, the question I ask is what made him?
• Will the graft/corruption charges be dropped once the Behrang and Changkat Jering assemblymen hops over to UMNO?
• Why did Tajol Rosli resign if he knew or at least expected this to happen?
• If the Sultan consents to the dissolution of the State Assembly, will BN regain Perak? Or will they get a bigger thrashing?

* apparently once an elected representative resigns, he/she is barred from contesting for 5 years.

IBF #06 - The Future of Islamic Finance

What drives the growth of Islamic finance? Is there a correlation between the spike in oil prices (and hence wealth) with the tremendous interest in Islamic finance? I’m not being a sceptic or a party pooper but would Islamic finance thrive if the oil price is low and the Muslim Arabs are poor? Anouar Hassoune, a banking analyst at Moody’s seem to think so. According to him, “As long as oil remains expensive, which is our base-case scenario, Islamic banking will keep on growing successfully.” Few would deny the obvious correlation between oil price growth and Islamic banking growth. Given the recent slump in oil prices, will we be seeing a decline in the interest for Islamic financial products?

Do We Need Another Airport?

9 January 2009 – The Star reports that the Labu LCCT ownership structure will ready by April

23 January 2009 – The Edge Daily reports that according to DPM Najib, Cabinet is re-evaluating Labu LCCT plans

The underutilisation of KLIA@Sepang is a known and accepted fact. We often hear of airlines preferring Changi or Suvarnabhumi as their South East Asian hub. The airport’s distance from the centre of civilisation makes air travel from KL to certain places like Ipoh or Kuantan redundant. So, do we need another airport barely 8 kilometres away from an underutilised modern airport?

The conspiracy theorists will point to Pak Lah, KJ, golden handshake, and pension fund, whatever. If they are true then the people who are running this country sucks. But is there any other explanation? What is Sime Darby getting out of LCCT@Labu? According to Tony Fernandes the current LCCT is running out of space and MAHB’s planned LCCT won’t be ready on time.

So, what happened to planning? Is the present LCCT a temporary terminal? If so, why didn’t they (whoever, MAHB, Transport Ministry, JKR etc) build a permanent one sooner? Why can’t Tony and friends just pressure MAHB to build the planned LCCT to their specifications? Why can't the government pressure MAHB to build the LCCT faster?

Why can’t Air Asia’s operations be moved to KLIA@Sepang? By increasing the utilisation of KLIA@Sepang, all the supporting sectors will benefit, the ERL will see higher passenger traffic, the shops at the airport will have a bigger market, increased revenue from car parking charges etc. MAHB should give Air Asia discounts on airport charges; bring it down to LCCT levels.

Why did we move from Subang anyway? Was the place too crowded? I don’t think so because the neighbourhoods of Ara Damansara, Subang Perdana, Pinggiran Subang or even Bukit Jelutong came AFTER the airport. The Government could have gazetted those areas as “airport reserve” and ban any form of development from taking place. Incidentally, Ara Damansara and Bukit Jelutong sit on plantation lands once owned by Sime Darby and Guthrie respectively. There is this area after terminal 3 (called U5, I think) where all the seafood restaurants are, that should have been part of the gazetted airport reserve too. Wouldn’t modernising Subang airport, upgrading and adding a few more terminals and runways been easier and cost effective?

The State of Malaysian Football

Apparently the FAM received RM300 million in sponsorship money from Dunhill between 1997 and 2005. The standard of Malaysian football however is nowhere near where it was in the 60s and 70s, which really proves the point that money can never buy success.

The formation of the semi-pro league in 1989 and its subsequent transformation into full professional status in the early 90s didn't achieve its desired effect of turning Malaysia into a respected football powerhouse. In January 1993 we were ranked 79th. As at 14 January 2009, FIFA ranked Malaysia 158th, down 2 rungs from a month ago. In Asia, we are ranked 29th, one spot below Maldives (no disrespect to them, but Maldives?). After the recent 5-0 mauling in the hands of the UAE, I won’t be surprised if we fall further down the rankings.

So, where did we go wrong? Why were the teams from the 60s and 70s so successful? Maybe instead of analysing what we did wrong, we should see how we can improve things.

Football, like any sport, should start from young, the very young. The trainers must also be of a certain standard. There should be continuity and consistency in the training and development programme and methods. We can’t be changing policies and systems every other year unless they are proven to be seriously flawed. Having said that, a policy or system can only be judged over a number of years and no fair conclusion can be made after only 12 or even 18 months.

Malaysia is a small-ish country with a small population therefore the stock of potential footballers is small. Given the limited resources, we can either take the Singapore route to success, i.e. buy success by naturalising foreigners (where is the glory in that?) or do things the right way by properly nurturing our young talents.

What I think we should do:

• Develop and train a pool of qualified coaches, at least at the ratio of 1 for every 10 primary schools. Have a proper, long term programme for coaches’ development.
  
• Train football managers, they have university courses teaching Golf Management, why not football management? Syllabus should include human resources, law, finance, public relations in addition to the footballing/physical education aspects.
  
• Set up and properly manage football clubs in large towns. Bigger towns may have more than one club.
  

Club structure must consist of :

• Youth teams (U-8, U-10, U-12, U-16, U-18, U-20), Futsal team;
• Own stadium and training facilities (pitch, gym, clubhouse with classroom, shower, medical rooms & recreational facilities);
• Professional & qualified management and coaching team. (Qualified and full time club manager, secretary, HR & finance officers, one coach for each team, physio, fitness coach);
• Clubs are to be run like a business; they must source for revenue (via ticket sales, sponsorships, selling advertising space in their stadiums etc), pay taxes, contribute to EFP and adhere to laws and regulations. Player contracts must be honoured;
• Clubs must not depend on handouts/grants from FAs for their operational expenses.
  

National FA must organise a proper league with a fixed calendar (adjusted for fasting month). Format, rules and regulations for the league must be consistent;

• All teams in all division will get a share of the prize money according to ranking at the end of the season;
• Organise a parallel league for all junior teams.
• State FAs to organise amateur state leagues.
• Two national teams, A team and the back-up B team, in addition to the age group teams.
  

League structure:

• All clubs qualify to play in league.
• Assuming total clubs in the country = 50
  Inaugural league will be broken into 5 geographical zones of 10 teams, playing home and away.
  The top 3 teams from each zone will make up the first division, next 3 teams, the second division and the last 4 teams from each zone makes the third division.
  Top 2 teams of the second and third division will be promoted up and bottom 2 from the first and second divisions will be relegated. Teams ranked third in the second and third divisions will play against the team third from bottom in the first and second division, the winners will play in the first and second division respectively.


• Keep the Malaysia Cup prestigious – only the top 8 teams from the top division qualify to play in the Malaysia cup, 2 leg knock out format. The final will be held at nation’s main stadium.


• FAM Cup – one leg knock out tournament. Teams from top division separated during first round draw. The first round of 64 teams will include the 50 teams from league and 14 champions of the state leagues.
  

This sounds a lot like the structure European football. Well, they seem quite successful, why can’t use their model? Maybe we’ll be successful too.

IBF #05 - Concepts Used in Islamic Trade (and Banking)

Some of the common contracts and concepts used to facilitate trade the Islamic way. These contracts are also used in Islamic banking and finance to facilitate financing transactions.

"Bai-al-Dayn"
Debt-trading.

"Bai-Bithaman Ajil (BBA)"
Deferred payment sales. Where goods are sold on a deferred payment basis at a price which includes a profit agreed by both the buyer and seller.

"Bai Inah"
A buy and sell contract between two parties where one party sells his asset to the other (price is marked up, payment is deferred) and subsequently buys it back at the cost price paid on the spot. This is often considered a hilah to facilitate the transfer of money under the pretext of trading.

"Bai Salam"
A contract where payment is made spot while the goods are delivered at an agreed later date. A form of advance payment trade but the goods must already be in existence.

"Hibah"
Voluntary, unilateral gift.

"Hiwalah"
Transfer of debt.

"Ijarah"
Lease contract. A lessor (owner) leases out an asset or equipment to its client at an agreed rental fee and pre-determined lease period. The ownership of the leased asset remains in the hands of the lessor for the duration of the lease.

"Ijarah Muntahiah Bittamlik"
Lease and subsequent purchase. Muntahiah Bittamlik describes the transfer of the title of the leased asset to the lessee at the end of the lease tenure.

"Istisna"
A contract to manufacture according to given specifications. The payment terms can either be spot, deferred or in instalments.

"Kafalah"
Guarantee or surety given by one party who agrees to discharge the liability of another party, as stipulated in the terms of the guarantee.

"Mudharabah"
Profit sharing and loss absorbing agreement between two parties, one the capital provider (Rab-al-mal) and the other, the entrepreneur (mudahrib). The profit-sharing ratio is agreed upon upfront while losses are borne solely by the financier.

"Murabahah"
Cost plus sale where goods are sold at a profit and the profit margin is known to the buyer

"Musawamah"

Bargaining sale where the seller need not disclose the cost

"Musyarakah"
Limited liability partnership. All partners share profits on a pre-agreed ratio but losses are shared on the basis of equity participation.

"Qardhul Hassan"
Interest-free loan or benevolent loan without a specified repayment terms or tenure.

"Rahn"
Collateral. Where a valuable asset is placed as collateral for a debt, he collateral may be disposed in the event of default.

"Sarf"
Currency exchange, i.e. buying and selling of foreign currencies.

“Tawwaruq”
Used in “Commodity Murabahah” transactions where an agent is appointed by the bank to purchase certain goods (usually metals other than gold and silver) which are sold to the customer at cost price with payment made spot. The customer then appoints the bank to sell the goods to another agent at a marked up price but payment is deferred.

"Ujr"
Commission or fee charged for services rendered.

"Wadiah Yad Dhamanah"
Savings with guarantee. It refers to a contract between the owner of the funds (depositor) and the Bank for safe-keeping purposes and the bank, as trustee, guarantees the repayment of the whole amount of deposits, or any part thereof, upon request.

"Wakalah"

Agency contract. It refers to the appointment of an agent who is authorised to act according to the term of the agency.

Plans for Redrawing the Middle East

The map was prepared by Lieutenant-Colonel Ralph Peters. It was published in the Armed Forces Journal in June 2006, Peters is a retired colonel of the U.S. National War Academy. (Map Copyright Lieutenant-Colonel Ralph Peters 2006).

Although the map does not officially reflect Pentagon doctrine, it has been used in a training program at NATO's Defense College for senior military officers. This map, as well as other similar maps, has most probably been used at the National War Academy as well as in military planning circles.

I was shocked to find an article by Mahdi Darius Nazemroaya at www.globalresearch.ca titled Plans for Redrawing the Middle East: The Project for a “New Middle East”

Among the things I learned from the article:

• The term “New Middle East” was introduced to the world in June 2006 in Tel Aviv by U.S. Secretary of State Condoleezza Rice
• This project, which has been in the planning stages for several years, consists in creating an arc of instability, chaos, and violence extending from Lebanon, Palestine, and Syria to Iraq, the Persian Gulf, Iran, and the borders of NATO-garrisoned Afghanistan.
• Secretary Condoleezza Rice stated during a press conference that “[w]hat we’re seeing here [in regards to the destruction of Lebanon and the Israeli attacks on Lebanon], in a sense, is the growing—the ‘birth pangs’—of a ‘New Middle East’ and whatever we do we [meaning the United States] have to be certain that we’re pushing forward to the New Middle East [and] not going back to the old one.” (Press Conference, U.S. State Department, Washington, D.C., July 21, 2006).
• the United States has deliberately blocked or displaced genuine democratic movements in the Middle East from Iran in 1953 (where a U.S./U.K. sponsored coup was staged against the democratic government of Prime Minister Mossadegh) to Saudi Arabia, Egypt, Turkey, the Arab Sheikdoms, and Jordan where the Anglo-American alliance supports military control, absolutists, and dictators in one form or another. The latest example of this is Palestine.
• The redrawing and partition of the Middle East from the Eastern Mediterranean shores of Lebanon and Syria to Anatolia (Asia Minor), Arabia, the Persian Gulf, and the Iranian Plateau responds to broad economic, strategic and military objectives, which are part of a longstanding Anglo-American and Israeli agenda in the region.
• The Middle East has been conditioned by outside forces into a powder keg that is ready to explode with the right trigger, possibly the launching of Anglo-American and/or Israeli air raids against Iran and Syria. A wider war in the Middle East could result in redrawn borders that are strategically advantageous to Anglo-American interests and Israel.
• Attempts at intentionally creating animosity between the different ethno-cultural and religious groups of the Middle East have been systematic. In fact, they are part of a carefully designed covert intelligence agenda.
• Even more ominous, many Middle Eastern governments, such as that of Saudi Arabia, are assisting Washington in fomenting divisions between Middle Eastern populations. The ultimate objective is to weaken the resistance movement against foreign occupation through a "divide and conquer strategy" which serves Anglo-American and Israeli interests in the broader region.

I do not know how far this is true. But if there is even the slightest truth in the report then we are in big big trouble.

Will There be a New World Financial Order? by Pankaj Kumar (The Star, Business section, 21 January 2009)

Copy of the email I sent to the Editor of The Star, commenting on the need for an alternative financial model.

Dear Editor,

Quoted from Pankaj Kumar's article in The Star 21 January 2009:
"The simple argument is that asset managers or hedge fund managers do not need crude oil or other commodities for that matter or even currencies in their books.
They have no business to be in these markets if they are purely speculating on price movements.
They should stick to basic investment in asset classes, that is, genuine companies that use these commodities for real markets, real products and real profits.
And yes, we do need a new world financial order to get rid of speculative activities which have time and again created asset bubbles and financial manias."

I cannot agree more with Pankaj's observation and would like to point out that an alternative financial order is already in place – Shariah (Islamic) based Finance. The principles of Shariah disapprove of uncertain contract terms, prohibit gambling and abhor speculative practices. Unfortunately, these elements are prevalent in most financial instruments of late which ultimately caused the fallout in the financial markets that we are experiencing now.

If undertaken in its true form, Shariah based financing can eliminate most of the problems associated with conventional financing as laid out by Pankaj in his article.

The key is however, to practice Shariah based financing as it should be, according to the principles of Shariah and not as a conventional product with an Arabic name. Shariah based finance is totally different in all respects from the conventional finance and banking the world has seen and grown to love for the past 100 years. It would be disastrous and detrimental to the development and growth of Shariah based finance if practitioners (and regulators) continue to develop so-called Shariah products based on the conventional platforms and norms.

What is needed is a paradigm shift in the way we approach and view Shariah based finance. We need to accept that although the objectives of Shariah based financing are similar to that of conventional finance, the means of achieving it is drastically different. Different here does not mean changing the product name or adding a few clauses in the transaction documents. The difference is in the mechanics, determination of profits (pricing), contractual obligations and relationship of all parties, the risk analysis and management, recovery methods, source of funds, utilisation of proceeds and remedies in the event of default.

In order for Shariah based finance to prosper, practitioners must not only be well versed in the laws of Shariah but more importantly understand the objectives of Shariah. The market also needs to be made aware of the uniqueness of Shariah based finance. Only then can we see the emergence of the true form of Shariah (Islamic) finance.

Regards,

Whither Bahasa Melayu? (updated)

What is happening to the Malay language? Where is it heading?

Old Malay language pre-Malacca era is heavily influenced by Sanskrit and would not be understood by the modern Malay speaker. A form of the modern Malay language as we know of today only became South East Asian lingua franca from the 15th century. The arrival of traders as well as missionaries from India and the Middle East during the heyday of the Malaccan Empire further developed the language through the adoption of Arabic, Indian and Persian words into the Malay vocabulary. The vocabulary is further enhanced with words from the Portuguese language after their invasion of Malacca in 1511. The structure, grammar, and spelling and to a certain extent the pronunciation of the Malay language is very much influenced by the languages of the Colonial powers that used to rule the region, English and Dutch. The development of modern day Malay language, including the modification of the Jawi spelling system can be attributed to Zainal Abidin bin Ahmad, better known as Za'ba, a prominent Malay language scholar of the 20th century (ref: http://www.bahasa-malaysia-simple-fun.com/history-malay-language.html).

In Malaysia, the Malay language has been called by many “names”; Bahasa Malaysia; Bahasa Melayu and even briefly in the 1970s, Bahasa Kebangsaan. The guardians of the Malay language (I presume Dewan Bahasa dan Pustaka, DBP) seem to not be able to decide on one name for the language. The indecision does not stop at the name of the language but also extends to spelling and vocabulary.

I see no need for the following words to be part of the Malay vocabulary;

• Bajet
• Informasi
• Diskusi
• Destinasi
• Aspirasi
• Komunikasi
• Prestasi
• Komuniti
• Memori
• Kompromi
• Demonstrasi
• Dekorasi
• Transformasi
• Pelan
• Aplikasi

When we already have;

• Belanjawan
• Maklumat
• Perbincangan
• Tujuan
• Harapan
• Perhubungan
• Pencapaian
• Masyarakat
• Kenangan
• Persetujuan
• Tunjuk Perasaan
• Hiasan
• Perubahan
• Rancangan
• Penggunaan

Why is the spelling in the Malay language so inconsistent? What is it now? Teladan or tauladan? How do we spell “station” in Malay? Stesyen or Stesen? There should be consistency in the structure of the language because one cannot be expected to master a language when it keeps changing all the time. It is especially hard for the children when the Malay language they mastered for UPSR for example, is no longer applicable when they sit for their PMR three years later.

What happened to the days when new Malay words were created from existing Malay words like "pawagam" for panggung wayang gambar or "kugiran" for kumpulan gitar rancak? That is what innovation is all about, creating new stuff, not by "stealing" stuff and tweaking it.

No doubt at 500 odd years old, the language is still relatively young and still developing. But the development of the language should be made when there is a need for it, for example new words added as a result of new discoveries or adopting an internationally accepted term to describe a certain item. There is no need to replace existing Malay words with English derived words under the guise of developing the language.

Travelogue #02 - Journey through the Cotswolds

Travel websites, journals and books often refer to the Cotswolds as the heart of England, well known for its gentle hillsides; quaint, sleepy little towns and villages and for being so typically English. I’m not so sure about the last part cos’ I’m not sure what typically English entails.

The best way to explore the Cotswolds is by car. This way, one can explore the area, stop when you see something interesting and spend as much time as you want at any particular place guided by a map (or road signs) and a reputable tourist guidebook.

A 3 day summer journey through the Cotswolds could bring one to Bath, Painswick, Cirencester, Bibury and Bourton-on-the-Water.

Not doubt the historical city Bath has a lot of worthwhile tourist attractions but in order to maximise coverage of the Cotswolds in 3 days, one has to choose only the main attraction – the Roman Baths. The engineering of the remarkable baths at Minerva's temple is evidence of Roman Britain’s technological feat. The complex was completed in the 4th century AD and had no fewer than five healing hot baths. An elaborate heating system serviced a series of hot sweat rooms; swimming pools and cold rooms. At the centre, in its own hall is the Great Bath. You can even sample the spring water at the Museum restaurant.

The Missus found a hidden attraction somewhere off the B4066 in the middle of nowhere, - Owlpen Manor, a Tudor manor house described by Prince Charles as the epitome of the English village but I somehow do not get what he’s getting at. It is now the residence of the Mander family. The house dates from the mid 15th century and was restored in 1926 after nearly 100 years of neglect. The interiors contain a series of unique painted textiles and Mander family portraits and collections. The Manor is surrounded by formal terraced gardens and magnificent yews of the 17th century. Among the ghosts recorded at Owlpen is that of Queen Margaret of Anjou, wife of Henry VI, who stayed at Owlpen in 1471. She is said to keep returning to the house where she spent her last happy night 500 years ago.

Painswick is a pleasant small hilltop town lined with pale grey limestone buildings on the way to Cirencester. The Rococo Gardens is just outside the town and it’s worth a visit.

Cirencester was the second largest town in Britain during the Roman era. We stayed at the Meadow Cottage, a nice family run bed & breakfast in the village of South Cerney. The bedroom has a very comfortable homely feel and the breakfast was so typically English. The Missus was however unnecessarily terrified by the playful and friendly family dog, Basil.
The Corinium Museum is an attraction suitable for history buffs like me where one can experience life as a Roman, marvel at the stunning mosaics, dress as a Roman soldier and explore their engineering and artistry. A history of Cirencester throughout the 18th and 19th century is also depicted here.

A must visit when in the Cotswolds is Bibury, situated on the River Coln 9 miles from the market town of Buford. The village was described by William Morris (1834-96, artist, writer and poet) as 'the most beautiful village in the Cotswolds'. The main attraction in Bibury is Arlington Row, a group of ancient cottages by the stream with steeply pitched roofs dating back to the 16th Century. There is a trout farm where you can catch your own trout and have fresh trout meals at the restaurant. We did only the latter.
Apparently Bibury provided the backdrop for the film Bridget Jones' Diary; I’ve seen the movie but can’t really pinpoint which scene.

Next is Bourton-on-the-Water, a little town which has been described as the 'Little Venice' of the Cotswolds. The town has a Model Village – an excellent miniature of Bourton (Burton) using authentic building materials depicting Bourton-on-the-Water as it was in 1937. The town’s layout today hasn’t changed much from how it was 70 years ago! Other attractions include a perfume factory, motor museum and model railway exhibition. A stroll along the clear stream that runs along the town is recommended before proceeding to the any of tea houses for some afternoon tea and scones. Yummy.
A scene from Bond’s Die Another Day was filmed at a car park in Bourton-on-the-Water.

3 days is definitely not enough to explore the Cotswolds.

The Many Faces of a Deer

IBF #04 - Sukuk

The Islamic Securities Guidelines (issued by the Securities Commission) defines Sukuk as: A document or certificate that represents the value of an asset;

The Shariah Standard 17 under the Auditing and Accounting Organisation for Islamic Financial Institutions (AAOIFI) applies Sukuk to Investment Products: Certificates of equal value representing, after closing of subscription, receipt of the value of the certificates and putting to use as planned, common title to shares and rights in tangible assets, usufructs and services, or equity of a given project or equity of a special investment activity.

Sukuk

• Undivided beneficial ownership in the underlying assets, entitled to share in the revenues generated by the Sukuk assets as well as being entitled to share in the proceeds of the realization of the Sukuk assets.
• Sukuk represent ownership in existing and/or well defined assets.
• Sale of a Sukuk represents a sale of a share of assets, business activity or project.
• The subject of the contract in Sukuk is a contract based on lease or a defined business undertaking between the Sukukholders and the originator.
• The underlying Sukuk assets, business or project must be Shariah compliant in nature.

Bond

• A contractual debt obligation, the issuer is required to pay interest and principal to bondholders on certain specified dates.
• Bonds represent pure debt on the issuer.
• Sale of a bond basically represents sale of a debt.
• Bonds basically create a Lender/Borrower relationship i.e. a contract whose subject is purely earning money on money.
  

Sukuks and Bonds are totally different instruments, serving different purpose, with different mechanics and goals. It would be erroneous to structure a Sukuk based on the conventional platform and norms. One must always look at structuring a Sukuk purely from the Islamic perspective and this includes contracts, legal documentations, pricing and the operational mechanics/modus operandi.

What are the factors that will make issuers and investors choose Sukuk over Bonds? From my observation, the decision is made mostly based on cost and price considerations. The attractiveness of Sukuk as compared to bonds in the Malaysian market is mainly due to the various incentives given by the authorities, especially tax exemptions/allowances. However, Sukuks are often structured to fit the conventional Bond model in the pursuit of mandates from clients.

Valuation:
Sukuk valuation at any point should be done based on market value; therefore both at issuance and dissolution, the Sukuk must reflect the market value of the underlying assets (except for Musharakah or Mudharabah where the value at issuance reflects the amount of equity injected into the venture). The same is true during an event of default and investors should expect to receive trhe market value of the asset and not a predetermined amount (principal) when a default occurs.

Role of the authorities:
The authorities that govern the financial markets play a very important and crucial role in developing the Sukuk market. Incentives should not stop at tax breaks but must also include providing the right platform for the Sukuk. Platform means the infrastructure, guidelines, rules and regulation, pricing and trading mechanism. Investor as well practitioners’ continuous education is of utmost importance, being a developing science, Islamic banking faces new challenges and new developments all the time.

Above all, the market, both the sell and buy sides must be fully aware of and understand what Sukuk and Islamic finance is all about. It is not about taking a conventional debt instrument; execute a few more legal documents and giving it an Arabic name.

Boycott or not to boycott?

The have been a lot of calls by almost everyone from politicians to NGOs to even the Utusan reading pakcik at the local kedai kopi for the boycott of goods and services produced by US/Jew owned corporations. The list of “sinner” companies include Marks & Spencer, Starbucks, Dell, Coca Cola, Levi’s, Philip Morris, Estee Lauder, Newscorp, Nestle, Sara Lee, Procter & Gamble to name a few. The proponents of this boycott claims it will teach the supporters of the Zionist regime a lesson and hurt them where it hurts them quite bad – their pockets. While this may be a right thing to do, it must be done the right way without making it worse for Malaysians in general. What are the consequences of this campaign? Will it bring more good than bad?

We are now living in a globalised era where the “nationality” of a corporation is extremely difficult to ascertain. How do we classify or identify the nationality or for that matter the race/religion of a company? What is a “bumiputera”* company? Is it defined by the composition of the shareholders? The composition of the workers? Suppliers? Market?

No Israel, No Hamas?

From: http://news.bbc.co.uk/1/hi/in_depth/middle_east/2001/israel_and_the_palestinians/340237.stm
May 1948 – Jewish settlers proclaim the state of Israel. British troops leave. Fighting breaks out with Arab neighbours, ending in October 1949.
Some 700,000 Palestinians flee or are driven from what had been British-mandate Palestine. Israel annexes large tracts of land. Jordan and Egypt hold onto the West Bank and Gaza Strip respectively. Control of Jerusalem is split between Israel in the west and Jordan in the east.

The words highlighted above shows that even the BBC agrees that the Jewish settlers illegally occupied Palestinian lands and drove the Palestinians out of their homeland.

From: http://www.helium.com/items/942983-how-the-events-of-1948-transformed-the-middle-east
On May 14, 1948, a battered, war-weary Britain prepared to evacuate from Palestine, having relinquished their responsibility for governing the area to the United Nations. In a small room in Tel Aviv, the leaders of a provisional Jewish government signed a Declaration of Independence and proclaimed the new state of Israel. Those actions immediately displaced all Palestinians and declared them nation-less.

Like most people (with exeception of perhaps a certain soon to retire President), I am deeply saddened and angered by the carnage and mayhem in the Middle East. I thus feel that maybe a quick look at how all this started could shed some light on why it is happening and how we can stop it. Please note that this is not a doctoral dissertation on the Middle Eastern conflict, it is merely an observation from afar.

In the 19th century, the land of Palestine had a multi-racial population of 86% Muslim, 10% Christians and 4% Jewish living in peace. However, in the late 1800s, a group called the Zionists, after rejecting alternative locations in South America and Africa, decided to colonise this land for the Jewish people.

The ancestors of many Gazans used to live in the country now called Israel. Prior to 1948, this country called Israel does not exist. On 2nd November 1917 the British government issued the Balfour Declaration from the foreign secretary Arthur J. Balfour in the form of a letter to a British Zionist leader (Lord Rothschild) promising the establishment of a Jewish state in Palestine. What right did the British government have to grant the establishment of a Jewish state in Palestine?

The refusal of the British government to grant Palestine independence as well as the large scale Jewish immigration beginning in 1922 culminated in a rebellion and strikes in 1937. This continued until after WWII.

In 1947, the British government gave up and passed the problem to the UN. The UN proposed to split the land called Palestine into two independent states i.e. Israel and Arab Palestine. But the Palestinian Arab state never came into being but instead, resulting from the 1948 war, the Israeli state occupied 77 per cent of the territory of Palestine, destroying more than 500 towns and villages and expelling most of the indigenous Palestinian population. It is estimated that more than 700,000 Palestinians were made refugees in 1948. Israel also occupied the larger part of Jerusalem while Jordan and Egypt occupied the other parts of the territory initially assigned by the partition resolution (Ref: http://www.un.org/Depts/dpa/ngo/history.html).

It was noted by some researchers that in the 1948 war, Zionist forces outnumbered the Arab and Palestinian forces three to two. It is also interesting to note that the Arab armies entered the conflict only after Zionist forces had committed 16 massacres, including the grisly massacre of over 100 men, women, and children at Deir Yassin lead by future Israeli Prime Minister Menachem Begin (Ref: http://www.ifamericansknew.org/history/).

The Arab states refused to recognise the Jewish state and wars broke out in 1956, 1967, 1973 & 1982. The number of Palestinian refugees at the moment is estimated to be around 4 million. Former Israeli Prime Minister Golda Meir once said, “There is no such thing as a Palestinian.”

Many see the Israeli attacks on the Gaza Strip in December 2008 as a justifiable retaliation to Hamas’ rocket attacks. Some even commented that if Hamas did not launch any rockets into Israel, the IDF would not need to retaliate. My answer is – the existence of Hamas, Hezbollah and PLO are due to Israel's illegal occupation of Palestinian land; expulsion of Palestinians from their ancestral homes and denying them basic necessities like food and medical supplies by laying siege over the refugee settlements. If there was no Israel, there would be no need for Hamas to exist.

Some of the Must Watch Movies from 2008

According to James Christopher, Kevin Maher, Cosmo Landesman et al from The Times (UK)


Gomorrah
"Matteo Garrone’s startling film about the criminal underworld in Naples is one of these rare movies that can alter our perception of life. It's brave to the point of foolhardy"


Man on Wire
"The American director James Marsh has created one of the greatest heist films of all times. Two things make his gripping docudrama so different: it’s all true, and the only thing stolen is air. It isn’t about art, it’s about us"


There Will Be Blood
"Paul Thomas Anderson's movie about the scramble for oil is a masterclass in how the West was truly sold. It's a marvellously entertaining soap: a sort of Dickens does Dallas, without the sex or swimming pools"

Bigga than Ben
"Two Russian immigrants come to London hoping to make an easy fortune, but turn to a life of crime: dark, funny, charming, fast, immoral, decadent and delightful"

The Changeling "This mature and thoughtful film is a many-layered triumph for Clint Eastwood and Angelina Jolie"

Donkey Punch
"This neat British horror-thriller stood head and shoulders above almost all of the fare on offer in Sundance this year"

The Edge of Heaven
"Isn't homage to anything other than the unassuming genius of its German-born Turkish writer-director Fatih Akin"

How to Lose Friends and Alienate People
"This hilarious account of the fall and rise of an English hack in New York is about what happens when you lose your principles and become alienated from your better self"

Kenny "This low-budget Australian mockumentary is one of the funniest, warmest films of the year, and Jacobson’s performance is so real that at times it feels unscripted"

Mad Detective
"This brilliant, funny Hong Kong thriller puts Hollywood to shame. A rookie cop enlists the aid of the former homicide detective to solve a murder case involving a missing policeman and his stolen gun"

RocknRolla
"You can sneer at Guy Ritchie's mockney heritage. But you cannot deny that as a full-throttle film-maker he is hard to beat for sheer energy"

The Strangers
"Supposedly based on a true story, this is the terrifying tale of what happened one night in 2005, when a couple was paid a visit by strangers at four in the morning"

Under the Bombs
"Not the usual look at the Middle East: a love story, a road movie and an important piece of reportage that is angry, funny and deeply moving"

Vicky Cristina Barcelona "Woody Allen’s latest comedy is a subtle spoof on the Don Juan myth and the funniest of the four films that he has assembled in Europe"

You, the Living
"The slapstick sequences are every bit as hilarious as the best of Tati, Keaton or Chaplin, and you end up willing the rest of the movie to sustain that level of euphoria"