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Saturday, 9 August 2008

Bursa Malaysia Expects 'Very Positive' Response To Commodity Murabahah House Project

KUALA LUMPUR, Aug 8 (Bernama) -- Bursa Malaysia Bhd is confident of getting a "very positive" response to its Commodity Murabahah House (CMH) project, due to be launched by first quarter of 2009.

The CMH infrastructure will be developed as a spot commodity market that will use crude palm oil (CPO) as the underlying commodity to facilitate Islamic financing based on the concept of Murabahah.

According to Bursa Malaysia head, product development of Islamic capital market, Norfadelizan Abdul Rahman, the commodity-based Murabahah transactions would be the first for Malaysia that used CPO-based contract.

"Demand will be a little bit slow initially, but once the people get use to it, I believe it will pick up very fast," he told reporters after the half-day workshop organised by the Royal Bank of Scotland on 'Innovations in Syariah Products', here Friday.

Norfadelizan said the new infrastructure would serve as the underlying instrument for Islamic finance and capital market products.

As a start, he said, the CPO would be used as a single commodity to support the local ringgit market.

"We have plans to include other commodities as well like metal which is widely used as commodity-based Murabahah transactions in other countries," he said.

He said the exchange had received enquiries from other countries to participate in the commodity-based Murabahah transactions.

Second Finance Minister, Tan Sri Nor Mohamed Yakcop, had earlier said the project has received strong support from producers who had committed about RM600 million worth of CPO to be used as the underlying commodity to support this initiative.

He was confident the new infrastructure would be further expanded to support multi commodities in meeting demands of the international market.

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