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Thursday, 19 July 2007

Malaysia Aims For First Syariah-compliant Exchange Traded Fund (ETF) To Be Listed

Malaysia is aiming for the first Syariah-compliant exchange traded fund (ETF) to be listed as the next step of the national agenda, Deputy Finance Minister Datuk Dr Awang Adek Hussin said Thursday."We hope more and more will be coming onstream and we want to take the lead in terms of having the first Syariah-compliant ETF listed in our market," he told reporters after officiating the listing of AmInvestment Bank's FBM30etf on the Main Board of Bursa Malaysia here.FBM30etf, the country's first equity ETF, allows investors to gain exposure to the top 30 largest listed companies by market capitalisation as it tracks the performance of the FTSE Bursa Malaysia Large 30 Index."We don't want to set a date or timeframe but it is sufficient for me to say that this will be the next step in the listing of Syariah-compliant ETF for us," Awang Adek said.He said the listed Syariah-compliant ETF would meet the demand of investors and promote the country as an international Islamic financial centre. An ETF is essentially a unit trust fund, except that it is traded on a stock exchange. It represents a basket of securities and is designed to track the performance of an index. The performance of an ETF usually mirrors that of the index it tracks.The government would organise a conference in late August or early September to discuss what needed to be done and "this would be the next immediate step", Awang Adek said."We are going to have a conference to bring the relevant Syariah scholars together to discuss about this and also familiarise everyone, including the scholars, in terms of the nature of the instruments," he said.Awang Adek said the government would get a wide spectrum of views on the matter as it was a difficult task to get everybody to agree on certain things."But I suppose we have to move along. There are, of course, some differences in terms of Islamic instruments introduced in individual countries," he said.Meanwhile, the FBM30etf performed commendably on its maiden listing, closing at a premium of four sen to its initial price of RM8.67 at RM8.71 with 20,150 lots changing hands.Throughout the session today, it moved between RM8.68 and RM8.73 after opening at RM8.65.Based on a Morgan Stanley report in February this year, the ETF market has total assets under management exceeding 435 billion euros (one euro=RM4.74) with over 750 ETFs globally. - (Bernama, 19 July 07)

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