Bursa Malaysia launches world's first end-to-end Islamic investing platform

KUALA LUMPUR: Bursa Malaysia-i, the world’s first end-to-end integrated Islamic securities exchange platform launched yesterday, is expected to elevate the visibility of the marketplace and Islamic Participating Organisations (POs) across the region and globally.
Bursa Malaysia-i offers investors the choice to invest in and trade syariah-compliant products via a syariah-compliant platform. It incorporates the full range of syariah-compliant exchange-related services including listing, trading, clearing, settlement and depository facilities.
Bursa Malaysia CEO Datuk Seri Tajuddin Atan told reporters at the launch yesterday that by providing a conducive marketplace for syariah investing, Bursa Malaysia hopes to position Malaysia as the pre-eminent marketplace for Islamic-based financial offerings and syariah investing.
He said 669 out of 902 counters on Bursa Malaysia are syariah-compliant. Out of the total Malaysian market capitalisation of RM1.6 trillion, RM1.1 trillion was syariah-compliant as of July.
Investors can choose end-to-end syariah investing via Bursa Malaysia-i with any of the nine syariah-licensed POs or brokers, including AmInvestment Bank Bhd, Affin Hwang Investment Bank Bhd, BIMB Securities Sdn Bhd, CIMB Investment Bank Bhd, Jupiter Securities Sdn Bhd, Kenanga Investment Bank Bhd, Malacca Securities Sdn Bhd, Maybank Investment Bank Bhd and RHB Investment Bank Bhd.
Bursa Malaysia chairman Tan Sri Amirsham A. Aziz said the shift towards ethical or value-based investing continues to grow and as at June 2016, 66% or 25 of the 38 FTSE4Good Bursa Malaysia Index constituents were syariah-compliant.
“This shift towards value-based investing also appears to track the increasing demand for syariah-compliant financial solutions. This has created a growing appetite for Islamic capital market products and services. It is a pattern that is observed globally and indeed evident in Malaysia,” he said in his speech.
Amirsham said while reports have consistently shown syariah indices to outperform the FBM KLCI, there is room for further growth and development of syariah indices, as a major difference is the lack of diversification from the financial sector.
“There is currently no financial representation in the FBM Hijrah Shariah Index. Therefore, it would be worthwhile for independent Islamic banks and Islamic banking subsidiaries to consider to be listed on Bursa Malaysia for possible inclusion into FBM Hijrah Shariah Index,” he said.
The FBM Hijrah Shariah Index constitutes 30 of the largest syariah-compliant companies and has consistently outperformed the FBM KLCI. The former grew by 30.6% between 2010 and July 2016 while the latter grew 8.8%.
Second Finance Minister Datuk Johari Abdul Ghani, who officiated at the launch yesterday, said the government wants to ensure that the B40 and M40 groups are not affected when implementing Budget 2017 and will continue with BR1M payments.
“We would also like to see how we can address the issue of PR1MA where they have built or are building houses, I was told, at 88 locations, 85,000 units. Most of these houses are priced from RM280,000 to RM300,000 and a lot of people want to buy them ... 380,000 have gone for the balloting but the problem is when they go to the bank, they cannot get the financing they want. The bank may approve financing, but only maybe RM200,000 or RM220,000.
“There’s a gap there, we are looking into this and the prime minister will announce something on this,” he said.
As for the arbitration of the dispute between1MDB and Abu Dhabi's International Petroleum Investment Co, Johari said the date will be at the end of September, without providing details.