The rapid internationalisation of Islamic finance needs to be underpinned by three key factors to ensure sustainability, says Bank Negara Malaysia (BNM) governor Tan Sri Dr Zeti Akhtar Aziz.

Firstly, a wide range of globally accessible and high quality Islamic financial products and services must be created to meet the requirements of international businesses, said Dr Zeti during her keynote address at the Global Islamic Finance Forum in Sasana Kijang, Kuala Lumpur yesterday.

Diversified and comprehensive Shariah-compliant financial solutions will be able to meet the different needs of businesses and facilitate crossborder investments, she said.

Secondly, the intermediaries and market participants must also be diverse and dynamic, including Islamic banking, takaful and capital market players that venture beyond domestic boundaries to tap global opportunities, she added.

Dr Zeti also said that talent was another imperative in pushing internationalisation.

“The new financial landscape will require world-class business talent and boards with knowledge of the risks connected with internationalisation. Greater collaboration between education service providers will ensure the talent requirements of the industry,” she said.

Thirdly, business enablers will facilitate effective linkages and connections between global financial markets, particularly in the area of legislation, taxation and regulation.

Distributor of French car Peugeot, Nasim Sdn Bhd, yesterday launched its 22nd outlet in the country — Peugeot Blue Box Chan Sow Lin — as part of its ongoing nationwide network expansion exercise.

“The Klang Valley is a key market with sales comprising 55% of Peugeot’s total sales in Malaysia. In light of that, Peugeot Blue Box Chan Sow Lin will play a pivotal role in meeting the after-sales needs of our customers in the Klang Valley,” said Nasim chief operating officer (COO) Datuk Samson Anand George.

“With this new 3S centre, we now have a total of 58 service bays in the Klang Valley with the capacity to service up to 3,500 cars a month, which represents a 46% increase from 2011,” said Samson.

He added that Peugeot Blue Box Chan Sow Lin will serve customers in Taman Bandaraya, Taman Sri Lempah, Mutiara Seputeh, Jalan Pudu, Kampung Malaysia Tambahan, Cheras, Pandan Perdana, Pudu and Bandar Tasik Selatan.

Samson said Nasim will, subsequently, be opening new outlets in Kota Damansara, Kuala Terengganu, Ampang, Taiping, Old Klang Road, Penang and Batu Pahat.

“Peugeot’s network expansion was in line with its growth in sales volume. As at end-August 2012, Nasim has sold 4,200 units, up 7.5% from the same period in 2011.

“In fact, we have now sold over 17,000 Peugeot cars since we took over the Peugeot franchise in 2008,” he said, adding that among Peugeot’s bestselling cars this year are the 207, the 308, the all-new 508 and 408.

Peugeot Blue Box Chan Sow Lin is a 3S centre, which cost Nasim an investment of RM4 million on the 35,000 sq ft facility. The facility’s service centre comprises 15 service bays that can service up to 45 cars a day. The service centre includes a body and paint shop.

Gold price is expected to hit US$1,800 (RM5,504) per ounce (oz) by the end of the year from the current price of US$1,770 per oz, buoyed by growing consumer sentiment to bank on gold, said Poh Kong Holdings Bhd, one of the biggest local jewellery retail chains.

Poh Kong estimates that the price of gold will continue its upward momentum, reaching US$2,000 per oz by end of 2013.

According to Poh Kong executive director Ermin Siow, gold price will remain bullish until 2015 as continued concerns over the US economy and other major countries like China remain as the key driver of gold prices

“Although more than 60% of world trade is transacted in the US dollar, the uncertain recovery of the US somehow puts limits on its gains,” said Siow.

“The third quantitative easing implemented by the government also did not show any signs of improvement to the country’s economy, so this pushed investors to buy more gold instead of the US dollar,” he added.

Global demand for gold for investment purposes rose 14.4% for the financial year ended June 30, 2012 (FY12), accounting for 37.5% of the total of 4,455.8 tonnes taken up, from the same period in 2011.

With the positive outlook of gold prices, Poh Kong expects a 25% growth in turnover for its previous financial year ended July 31, 2012. Poh Kong’s full-year results for 2012 is expected to be announced soon and the growth is calculated on an annualised basis, said Siow. The jeweller recorded a turnover of RM692.5 million in FY11.

Meanwhile, Siow said Poh Kong was looking to expand the number of retail outlets in the Asean region as part of its preparations to take advantage of the Asean Economic Community which will come to force in 2015.

“We are seriously looking at Vietnam and Indonesia and hope to establish an outlet each in these countries,” Siow said.

Reviewing the domestic gold market, he said the total local consumption in 2011 was 20 tonnes of gold estimated at RM4 billion, with Poh Kong, Tomei Consolidated Holdings Bhd and DeGem Bhd having a total sales of about RM1.5 billion.

On the jewellery market last year, Siow said Malaysia exported about RM7.164 billion worth with 54% sold to the United Arab Emirates, 20% to Singapore while Thailand, Japan and Hong Kong had exports of 8%, 6% and 4% respectively.

It is reported that China, the largest gold producer in the world based on its potential gold reserves, is also the biggest market for the commodity due to its large population base, having overtaken India last year, while Vietnam and Thailand have risen to be significant markets.

Turkey, which has weathered the most recent economic crisis in Europe after taking the bull by the horns with a slew of political and economic reforms, is now looking at improving the standing of its judiciary, its senior leader told a global Islamic finance forum.

According to Turkey’s Deputy Prime Minister Ali Babacan, fiscal or monetary expansion should be accompanied by a medium- term credible programme for normalisation.

“We cannot continue with excessive balance sheets for central banks forever, and we cannot continue with excessive budget deficits,” said Babacan.

“If there is a short-term implementation of the expansion, it should be accompanied with medium-term consolidation programme and a clear exit strategy,” he said in a talk at Global Islamic Finance Forum (GIFF) in Kuala Lumpur yesterday.

Babacan was delivering a public lecture at the third annual forum hosted by Bank Negara Malaysia (BNM). The three-day multiple programmes ends today.

In late August, Fitch Ratings noted Turkey’s “remarkable” export boom to the Middle East and viewed that its economy was on
track to stage a soft landing. It indicated that Turkey might even see an upgrade to investment grade status. Babacan said that there was at the moment a debate whether nations should opt for tighter or looser fiscal policies to cope with the present economic crisis.

“Confidence should be the main theme when coming out with policies. For countries where public debt is a source of concern for markets, fiscal stimulus programme would probably not work. We are observing this in a very clear way in Europe, the epicentre of the crisis,” he said.

He added that the activities of the central banks, especially the European Central Bank and the US Federal Reserve’s latest round of quantitative easing, should be considered as a “window of opportunity for the governments to take the steps forward.”

On financial stability, he emphasised the importance of proper regulations and supervision, and the relevance of external checks and balances, pointing out that Turkey had always welcomed external inspections.

He was referring to the Financial Sector Assessment Programme (FSAP) jointly conducted by the World Bank and the International Monetary Fund (IMF).

“We believe that is healthy: being more transparent, more open to checks from outside. It is important, especially for developed countries. No country should be overconfident about its financial system,” he said.

Since 1999 the IMF has monitored countries’ financial sectors on a voluntary basis through a joint review process with the World Bank under FSAP. In September 2010, in response to the global crisis, the IMF’s executive board agreed the world’s top 25 financial sectors would undergo a mandatory financial checkup every five years, according to an IMF statement released in January.

It noted that this year would be a busy year as the IMF plans to evaluate 18 countries’ financial health to spot any potential trouble on the horizon. The IMF then produces a detailed report that includes recommendations for the country on how to strengthen its financial stability.