KUALA LUMPUR: BURSA Malaysia is positioning itself as the go-to bourse for syariah-compliant investing in the world.
Its Islamic capital market director Jamaluddin Nor Mohamad said the roll-out of Bursa Malaysia-i, the world’s first end-to-end syariah-compliant investing platform, last September was a key milestone in the plan.
Bursa Malaysia-i incorporates the full range of syariah-compliant exchange-related services, including listing, trading, clearing, settlement and depository services, to underscore Bursa Malaysia’s leadership as the global marketplace for syariah listing and investments.
Jamaluddin said in a recent interview 74 per cent of companies listed on the bourse were already syariah-compliant.
“In terms of market capitalisation, 70 per cent of that is syariah-compliant and 60 per cent of the activity level on Bursa Malaysia is syariah-compliant instruments. That is significant,” he added.
Jamaluddin said Malaysia had seen increased demand for syariah-compliant instruments and activities and despite the economic headwinds, it was still the best time to roll out this offering.
“What’s unique about this platform is that it provides an avenue for investors who are seeking syariah-compliant instruments to not just invest but to also undertake other activities in a manner that is syariah-compliant.”
The platform would increase the activity and visibility of Bursa Malaysia, which would ultimately help gather stronger syariah liquidity domestically and globally, he said.
The platform is open to institutional and retail investors.
The bourse is also optimistic that within the 12 months to September, 10 per cent of syariah-compliant activities will be generated through the platform.
“Our existing system enables investors to trade both in conventional and Islamic equities but with Bursa Malaysia-i, it will be more targeted. To be clear, this new offering is not about segregating investors’ options in a very limited manner,” said Jamaluddin.
He said there had been significant growth in domestic Islamic finance participation. As of the end of 2015, the size of the Islamic capital market in Malaysia was RM1.7 trillion, which included banking, takaful, equities and others.
“This is expected to grow bigger over time. The market is there and the exchange wants to be able to serve the market.”
Malaysia’s leadership in the Islamic capital market makes Bursa Malaysia a significant avenue to facilitate Islamic capital market activities.
“In addition, the increasing preference for syariah-compliant investments creates a growing demand for Islamic capital market products hence, opportunities for Bursa Malaysia and its listed companies to tap the growing Islamic principled funds,” added Jamaluddin.
In terms of global Islamic funds, Malaysia is the second highest in global Islamic asset under management (AUM) after Saudi Arabia. Both countries account for 69 per cent of the total global syariah-compliant AUM.
Bursa Malaysia is a leading emerging market exchange for syariah-compliant securities, offering investors a wide choice of syariah products listed on the Main and ACE markets.
These include i-Stocks, which comprise 73 per cent, or 669, of stocks listed on Bursa Malaysia, i-Indices (syariah-compliant indices), i-ETFs (syariah-compliant Exchange Traded Funds), i-REITs (syariah-compliant real estate investment trusts) and Exchange Traded Sukuk.
Investors can choose end-to-end syariah investing via Bursa Malaysia-i with any of the nine syariah-licensed participating organisations or brokers, including AmInvestment Bank, Affin Hwang Capital, BIMB Securities, CIMB Securities, Jupiter Online, Kenanga Investment Bank, RHB Investment Bank, Malacca Securities and Maybank Investment Bank.