New CMDA CEO appointed by President

President Abdulla Yameen has appointed Ahmed Naseer of Musthareege, Kaafu Atoll Maafushi to the post of CEO of the Capital Market Development Authority (CMDA).

According to a tweet from the presidential Spokesman Ibrahim Muaz, Naseer was was appointed to the post at the level of deputy minister. He previously served as a state minister at the Ministry of Finance and Treasury during President Mohamed Nasheed’s administration.

The position of CEO of CMDA was left vacant after the resignation of Fathimath Shafeeqa’s resignation from the post last month.


Legal restrictions a challenge to investment expansion: Pension Office

The Maldives Pension Administration Office (MPAO) has said legal restrictions are preventing the expansion of investments into profitable industries such as real estate.

The MPAO cannot invest in real estate as none are currently listed securities at the Maldives Stock Exchange, the only registered stock exchange in the country, said CEO Mohamed Hussain Manik.

The Maldives Pension Act states that pension assets can only be invested in securities listed at a licensed stock exchange in the Maldives.

Manik said the office was currently in the process of identifying reliable and secure investments at technical level. Based on the findings of this work, the MPAO will consider expansion, but it may require amendments to the law, he added.

In order to prepare for the future plans for expansion, the MPAO recently held an investment seminar targeting the finance sector as well as a finance forum to discuss international finance and capital markets.

While the Pension Act details many conditions which should be considered when investing from the fund – such as minimum risk and maximum returns for the beneficiaries of the scheme – it also stresses diversification of investments.

According to the office, the annual return from current investments are on average at 7 – 8 percent with the fund expected to reach an estimated MVR3 billion by September or October this year.

In a press statement, the office has said that, considering the current inflation rates, this return is profitable for the beneficiaries for the scheme.

It was highlighted, however, that in order to sustain the increasing returns as the fund grows in size, they may have to take advantage of more investment opportunities both in the Maldives and abroad.

Statistics from April 2014 indicate that nearly 83 percent of the fund’s investment portfolio goes into government treasury bills which, according to the office, is also the most profitable due to high interest rates caused by increasing government debt.

Only 7 percent of it is invested in domestic equity and less than seven percent in fixed deposits.

Earlier this month the Capital Market Development Authority (CMDA) – an independent institution set up to develop and regulate the capital market and pension industry – said market development had not kept pace with pension development.

Speaking to Minivan News, CEO of the authority Fathimath Shafeega highlighted the importance of diversification and seeking profitable alternative investments for the pension fund, beyond the limitations of the Pension Act.

She also said that, following CMDA recommendations, the government – which holds a majority in the newly inaugurated parliament – is planning to introduce amendments to the Pension Act.

Beginning in March this year, the government more than doubled the monthly basic pension – with all citizens aged over 65 now receiving MVR5,000.

The basic pension, to which all retirement-age citizens are entitled, is still MVR 2,300 per month while the additional MVR2,700 is provided from the state budget by the Ministry of Finance and Treasury.

With an estimated 17,000 pensioners, the government had allocated MVR470 million (US$30.5 million) in the state budget to give out an MVR2,300 (US$149) in cash handouts.

At the time, the head of the cabinet’s economic council Ahmed Adeeb said that “innovative” methods, such as investing in the pension fund or government T-bills would prevent the need to divert funds from within the state budget. The MPAO has, however, said that no such arrangements have yet been made with regard to the basic pension.

The MPAO investments are currently made only for the Maldives Retirement Pension Scheme (MRPS) beneficiaries, a defined contribution scheme which requires both employer and employees to contribute seven percent (total fourteen percent) of the pensionable wage.

Under the plan, pension benefit payout at retirement will depend on the amount contributed and investment returns. It is mandatory for all Maldivian contract employees but voluntary for foreign employees.

Currently, MRPS beneficiaries will also receive a minimum of MVR5,000 if their payout is smaller than this amount.


MMA governor calls for courageous cuts at third Maldives Finance Forum

The third Maldives Finance Forum was opened with the Governor of the Maldives Monetary Authority (MMA) Dr Azeema Adam calling upon stakeholders to take more courage in reducing government expenditure.

“There needs to be a change particularly with regards to disorganised subsidies, and revenue needs to be increased,” Dr Azeema was reported to have told attendees.

“But that is not something the government alone could do. It should be done together by many.”

Azeema’s comments echoed the findings of the MMA’s 2013 macroeconomic report, which warned that further “slippages” in revenue or spending would undermine medium-term debt sustainability,with adverse effects on exchange rate and prices.

The third Maldives Finance Forum took place today at Bandos Island Resort, focusing on the issue of international financial and capital markets, and financial literacy.

Organised by the Maldives Pensions Administration Office (MPAO), the event sought to bring together leaders from the political, academic, financial, and social sectors to share ideas for the further development of the Maldivian financial sector.

Also speaking at today’s forum were Head of Official Institutions at Schroders Gavin Ralston, Global head of the JP Morgan’s Islamic Finance practice Dr Hussain Hassan, Minister of Economic Development Mohamed Saeed, and leading figures from the Maldivian business community.

Among the forum’s stated objectives the identification of legal and regulatory impediments to development, the promotion of financial literacy among the public, and awareness raising of the potential of the country’s pension fund.

The pension fund – overseen by the Capital Market Development Authority (CMDA) – is currently in need of diversification, CMDA CEO Fathimath Shafeega recently told Minivan News

“As you know the pension system in Maldives has assumed that there will be a developed capital market. The development of the capital market has not kept pace with the pension development,” she explained .

Beginning in March this year, the government more than doubled the monthly pension – with head of the Cabinet’s Economic Council Ahmed Adeeb stating that “innovative” investment would prevent the need to divert funds from within the current budget.

The CMDA’s quarterly report last week for the first time featured details of the country’s nascent Islamic Capital Markets, indicating the rapid growth of Shariah-based financial products in the country in recent years.

Shafeega expressed confidence that the Maldives was well positioned to become an international centre of both Islamic and non-Islamic finance in future years – the evolution of both these areas was discussed by touched Mr Ralston and Dr Hassan, respectively, at Bandos today.

Today’s speech from the economic development minister discussed issues faced in attracting foreign investment and finance – something the current government has made a priority, organising a landmark foreign investment forum in Singapore last month.

The ensuing panel discussion at today’s forum concerned accessing global financial markets and securing foreign investments.

During the recent investment forum in Singapore, President Abdulla Yameen announced his intention to create “a resilient, diversified high income economy in the next decade.”

The government was committed to exploring “openings for increasing foreign investment flows to non-traditional sectors to lift Maldives beyond the image of a picturesque postcard,” said Yameen.

The current economy relies on the tourism industry for an estimated 80 percent of GDP.


CMDA states that government will cooperate to appoint more females to boards of directors

The Capital Market Development Authority (CMDA) has had confirmation it will receive complete government support in its initiative to appoint more females to the boards of directors of various companies.

The CMDA stated that in meetings with its CEO President Abdulla Yameen has agreed to support the authority’s initiative to introduce changes to the Corporate Governance Code, making it obligatory that 30 percent of all company boards registered with the authority by 2016 must be female.

The development authority further stated that 24 percent of participants in the director training and corporate governance awareness programmes held to date are female. Thereby, the authority is confident that there are a high number of qualified and capable female professionals in the country.

The authority further revealed that it has plans to conduct training to increase female participation in company boards.


BML fined Rf10,000 for not publishing quarterly report

The Capital Market Development Authority (CMDA) has fined the Bank of Maldives Plc for upto Rf10,000 (US$648) after the bank failed to publish the quarterly report for the last three months of 2011 before the requested due date.

According to a statement released on Sunday, the companies listed under under the Securities (Continuing Disclosure Obligations of Issuers) Regulations, including BML, must produce a quarterly report after every three months, within the following 30 days.

However, CMDA noted that BML failed to produce fourth quarterly report for last year within the given 30 day period and the 37 day extension which ended on March 8.

Therefore under the 17 section of the regulations, the bank has been fined Rf 10,000 (US$648) and ordered to publish the report by March 15.

According to the bank, the report has been delayed due to a pending audit, local newspaper Haveeru reported.

The fourth quarterly report requires more work as it must be published with annual figures that must be audited prior to publication, the bank said.


CMDA to license companies for Sharia-compliant securities

Capital Market Development Authority (CMDA) has opened applications to companies wishing to provide Sharia-compliant securities.

According to local media, CMDA will screen companies to ensure that their operations and transactions are made in alignment with Islamic Shariah.

Licenses will be awarded following consultation with the Capital Market Sharia Advisory Committee.

Sharia-compliant security services are most notable for their exclusion of interest. Currently, Amana Takaful is the only insurance company licensed to provide Shariah-compliant services to the Maldivian public.


President appoints executives to CMDA, MQA

Former Financial Controller at the Finance Ministry Ahmed Assad has been appointed to the post of Chairman of the Capital Market Development Authority (CMDA).

Assad was appointed by President Mohamed Nasheed earlier today. He is a brother of Housing Minister Mohamed Aslam.

Assad served as the State Minister for Finance and Treasury before accepting the post of Financial Controller on April 8 this year. He resigned from this position in November for undisclosed reasons.

In a letter accepting Assad’s resignation, President Nasheed thanked him for his support in drafting the ruling Maldivian Democratic Party’s (MDP) manifesto, Haveeru reports.

The President also appointed today Dr. Abdul Muhsin Mohamed as the Chief Executive Officer at the Maldives Qualification Authority (MQA). The MQA oversees and issues professional credentials in the Maldives.