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Sunday, 22 June 2008

Stock Exchange Regulator Bursa Malaysia to Launch Two New Islamic Products By Q1 2009

STOCK exchange regulator Bursa Malaysia is expected to launch two new Islamic products by the first quarter of next year, namely a Commodity Murabahah and a syariah-compliant securities borrowing and lending (SBL).

The Commodity Murabahah will leverage on the country's competitive position in the crude palm oil market, Second Finance Minister Tan Sri Nor Mohamed Yakcop said.

This initiative will enable palm oil to be used as the underlying instrument for Islamic finance and capital market products, the first for Malaysia.

"This product has received tremendous support from palm oil producers who have committed close to RM600 million worth of crude palm oil to be used as the underlying commodity," he said in his keynote address at Bursa Malaysia's Malaysia Islamic Capital Market conference in Kuala Lumpur yesterday.

He added that the amount is expected to reach RM1 billion by year- end.

"I am confident this infrastructure will further expand to support multi-commodities to meet the demand of the international market."

The syariah-compliant SBL, meanwhile, is a structure that uses conventions of waad (exclusive promises) to support the creation and redemption of Islamic Exchange Traded Funds (ETFs).

"Through this syariah alternative SBL infrastructure, Bursa Malaysia hopes to match the needs of issuers with investor requirements," said Nor Mohamed.

(New Staits Times)

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