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Bursa Malaysia eyes Turkey, M.East Islamic mkts

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Points of Essence:

  • Bursa Malaysia is collaborating with the stock exchanges in Turkey and then Middle East to develop their Islamic financial markets. This is in addition to the same initiative done with Korea to develop its electronic trading platform for Islamic commodity trading as well as commodity murabaha instruments. The international collaboration will help fueled Malaysia’s aim to become a global hub for Islamic finance.  Reuters has the report.

KUALA LUMPUR, Nov 19 (Reuters) – Bursa Malaysia, the Malaysian stock market operator, is looking to work with stock exchanges in Turkey and the Middle East to help develop their Islamic financial markets, its CEO said on Wednesday.

“We will exchange information, share with them our experience and as we get to know their markets better, we hope that the products we develop, we can market to the investors there,” Yusli Mohamed Yusoff told reporters.

Last week, Bursa said it will develop with its South Korean counterpart an electronic platform to offer trading of Islamic commodity products. They would also develop the infrastructure for commodity murabaha instruments.

In a murabaha deal, a financier such as a bank buys a commodity and sells it to the customer at a higher price, complying with Islam’s ban on interest.

Yusli also said he expected a new exchange-traded Islamic fund to be launched next year.

The fund will be launched by a fund manager, as yet unidentified, he said, adding Bursa will create an index for the fund, based on the plantation and oil and gas sectors.

Islamic investments avoid interest-based financing in favour of a fair distribution of profits and losses and gains from ethical ventures.

Malaysia is stepping up efforts to attract investors who demand assets that comply with Islamic principles with an eye to becoming a global Islamic banking hub. The Southeast Asian economy already has the world’s largest sharia bond market.

Yusli also said the merger of the Malaysian stock exchange’s main and second boards is likely to be completed by the middle of next year. (Reporting by Liau Y-Sing; Writing by Faisal Aziz, Editing by Ian Geoghegan)



Written by Suapi Shaffaii

November 20, 2008 at 12:02 am

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