INTERNATIONAL ISLAMIC

FINANCIAL MARKET

Jamaluddin Nor Mohamad

Director, Islamic & Alternative Markets
23 May 2015

Bursa Malaysia: An Integrated Exchange

How Bursa Malaysia plays its role in the Islamic Capital Market
SECURITIES DERIVATIVES ISLAMIC OTHERS
Main Market: 797 companies  Commodity Derivatives:  Shariah-compliant  Bonds Reporting on
ACE Market: 106 companies Gold Futures, CPO equities, i-ETFs, i-REITs Electronic Trading
Market Capitalisation Futures, Crude Palm  Bursa Suq Al-Sila’ Platform
(as at 31 May 2015): Kernel Oil Futures  Sukuk  Bonds & Sukuk listing
RM1.68 trillion  Equity Derivatives:  Exchange Traded Bonds
Products: Shares, ETFs, FBMKLCI Futures, & Sukuk (ETBS)
REITs, Warrants, CBBCs, Loan FBMKLCI Options  Labuan International
Stocks & Bonds  Financial Derivatives Financial Exchange (LFX):
Non-Ringgit Securities

Listing Trading Clearing Settlement Depository

Islamic Financial Islamic

Takaful
Institutions Capital Market

Shariah-compliant
Sukuk/ ETBS
Securities
 i-Stocks
 i-Indices
 i-ETFs
 i-REITs
2

1
 Highlights of Our Marketplace

Diverse | Sustainable | Multinational

We are a market on the move

Ease of Doing Business Best Emerging Market

6th
Out of 189 Up
from 20th
3rd Best among the
Emerging Markets
2009: 20th out of 181
2014: 6th out of 189
Source: World Bank Doing
Business Report 2009 and 2014 Source: Bloomberg

% Overseas Revenue FBM KLCI PLCs

45%
FY 2012
38% 33% 28%
FY2011 FY2010 FY2009
Source: Bloomberg, Maybank Kim Eng

2
Growth of Our Market Since 1997

OVERVIEW OF MALAYSIAN
ISLAMIC CAPITAL MARKET

Harmonisation
of Islamic
Market

3
Malaysian Dual Financial System

Conventional Capital Money

Insurance
Banking Market Market  Different clearing &
settlement system
 Different instruments
for liquidity
Clients and investors in Malaysia have access to management
variety of products and services
 Similar regulatory
objectives
 Similar medium for
Islamic Islamic
Islamic
Takaful Capital Money alternative dispute
Banking
Market Market resolution

Level playing field environment creates healthy competition

Malaysian Islamic Finance Landscape

Where Bursa Plays its Role

Islamic Financial Islamic

Takaful
Institutions Capital Market

Commodity Shariah Compliant Sukuk/ ETBS

Trading Platform Equities

iStocks iIndices iREITs iETFs

8

4
 Shariah-compliant Product Offerings
Creating supply of Shariah-compliant products for the market

Shariah-compliant
Products Intermediaries
products

S
Equities S C i-Stocks Islamic
H R Stock-
Indices i- Indices broking
A E
ETFs R E i-ETFs
I N Stock-
REITs i-REITs
A I broking
H N (Participant
Warrants Sukuk
Organisations)
G
Loans/
Debenture

Bonds/ Sukuk

Securities Screening Methodology

Development of screening methodology to determine the Shariah
compliance of securities traded on Bursa Malaysia
Shariah compliance review is undertaken for
Each public listed company is reviewed based on
securities of companies listed on the Exchange &
the latest annual audited financial statements
during pre-initial public offering (IPO) companies

For pre-IPO companies, the screening for Shariah-

The list of Shariah-compliant securities is updated
compliant status is made upon application
and published every May and November
(voluntary)

Pre-Revision Post Revision

(since establishment in 1995) (Effective from November 2013)

Quantitative Assessment Quantitative Assessment

 4 activity-based benchmarks  Two-tier quantitative approach:
<5%; <10%; <20%; <25%  Activity-based benchmarks
• 2 activity-based benchmarks
Qualitative Assessment <5%; <20%
 Public perception or image  Financial ratio benchmarks (<33%)
 Image of the company’s activities • Cash Over Total Assets
• Debt Over Total Assets
“…To further build scale in the Shariah-compliant equity and
investment management segments as well as expand the Qualitative Assessment
Islamic Capital Market’s (ICM) international reach,…”  Public perception or image
~ Capital Market Master Plan 2~
 Image of the company’s activities 10

5
 EQUITIES MARKET

Shariah Compliant
Instruments
___________________________________

Revised Shariah Screening Methodology

In view of the current development and sophistication of the industry in
support of internationalisation of Islamic Finance

Pre-Revision Post-Revision As at
(28 November 2013) (29 November 2013) 31 May 2015
Market Capitalisation: Market Capitalisation:
RM1,011 bil RM1,064 bil

652 674
799 (71.3%)
(87.4%) (74.6%)

262 232
115

Note: PLCs = Public Listed Companies

There is a scarcity premium for Shariah-compliant stocks

as the pool of such stocks is now more limited than before…
~ “2014 Outlook & Lookouts”, Maybank IB Research, 23 December 2013 ~

12
Source: Securities Commission Malaysia; Bursa Malaysia

6
 Islamic Exchange Traded Funds (i-ETFs)

Efficient Way to Diversify Carry both

 Asia’s first Shariah-compliant ETF listed on Bursa features of
shares and unit
Malaysia, MYETF Dow Jones Islamic Market trusts
Malaysia Titans 25 (MyETFDJIM 25) was launched
in 2008.
New
 The second iETF, MyETF MSCI Malaysia Islamic Tradable on
investment
Dividend (MyETF-MMID) launched on 27 February exchange
diversification
2014 was successfully listed and traded on 21
March 2014. Advantages
 The third iETF, MyETF MSCI SEA Islamic Dividend
(MyETF-MSEAD) launched on 8 April 2015 was
successfully listed and traded on 7 May 2015
More
 i-ETF NAV (April 2015): RM332.19 mil Lower cost
transparency
(represents 31% of ETF industry)
ETFs NAV
(Apr 2015)
ETF is an open-ended fund offered in form
MyETF-DJIM 25 RM290.89 mil of securities which are tradable on
exchange
MyETF-MMID RM21.42 mil
MyETF-MSEAD RM19.88 mil Securities represent ownership in certain
ABF Malaysia Bond Index Fund RM732.36 mil underlying asset among other shares
(equity basket) which is held by Trustee
FBMKLCI ETF RM3.11 mil
CIMB FTSE ASEAN 40 Malaysia RM2.5 mil ETF normally track certain equity index
CIMB FTSE Xinhua China 25 RM17.64 mil representing the underlying basket
13

Islamic Real Estate Investment Trusts (iREITs)

The Easiest Way to Invest in Large-scale Real Estate

 REIT or property trust fund means an
investment vehicle that invests at least
Launched by KPJ Healthcare Bhd in
2006 is the first iREIT in the world
50% of its total assets in real estate.
and the world’s first hospital iREIT.  An investment in real estate may be by
way of direct ownership or a
shareholding in a single-purpose
Converted into Islamic in 2008, is company whose principal assets comprise
based on office and industrial of real estate.
properties.
 Islamic REIT (iREIT) is a collective
investment scheme in real estate, in
which the tenants operate permissible
activities according to the Shariah.
Malaysia is the first country to introduce
guidelines for iREITs.
 As at August 2014, there are 3 iREITs
listed on Bursa Malaysia against a total of
16 listed iREITs, representing RM14.5 bil
or 42% of market capitalisation of
MREIT.
KLCCP Stapled Group REIT
 World’s first Shariah compliant stapled
securities
 ASEAN’s 3rd largest REIT
 Listed on 9 May 2013 on Main Market 14

7
 i-ETFs and i-REITs
Efficient Way to Diversify The Easiest Way to Invest in Large-scale
MyETF Dow Jones Islamic Market Real Estate
Malaysia Titans 25 (MyETF-DJIM 25)  Launched by KPJ Healthcare Bhd in 2006
NAV (May 2015) RM280.39 mil  World’s first i-REIT and hospital i-REIT
 Converted into Islamic in 2008
MyETF MSCI Malaysia Islamic  Office and industrial properties
Dividend (MyETF-MMID)
 World’s first Shariah-compliant stapled
NAV (May 2015) RM21.88 mil securities
 ASEAN’s 3rd largest REIT
MyETF MSCI SEA Islamic Dividend
(MyETF-MSEAD)
NAV (May 2015) RM21.75 mil

15
Source: Bursa Malaysia

Shariah Indices

 FTSE Bursa Malaysia EMAS Shariah Index

 FTSE Bursa Malaysia Hijrah Shariah Index
 FTSE Bursa Malaysia Small Cap Shariah Index

 Investability Screen
o Free-float adjusted
o Liquidity screened

 Review Dates
Semi-annually in June and December

Source: Bursa Malaysia

16

8
Launch of the Environmental, Social &
Governance (ESG) Index
The FTSE4Good Bursa Malaysia (F4GBM) Index to measure the
performance of companies demonstrating strong ESG practices. The index
is aligned with other leading global ESG frameworks such as Global
Reporting Initiatives and the Carbon Disclosure Project

17

SUKUK

Shariah Compliant
Instruments
___________________________________

9
 Global Sukuk Issuances
Sukuk has played pivotal role in infrastructure financing for both public
and private projects. Overall, the sukuk market is expected to reach
greater heights.

Malaysia’s sukuk market is recognised as the most

vibrant and active in the world. In 2013, Malaysia
maintained its top position as the largest sukuk
issuer with a 69% share of the total issuances in
2013 amounting to almost USD82.4 billion.
By currency, Malaysian Ringgit sustained its
domination representing 67% of total sukuk
issuances for the year 2013 worth USD80.4 billion.
By structure, Murabahah is the most popular
instrument in Malaysia representing 75% or USD61.8
billion of total Malaysian sukuk issuances. 19

Listing of Sukuk on Bursa Malaysia

In an effort to promote the fixed-income markets whilst enhancing the
breadth and depth of investment options in Malaysian capital market
EXEMPT REGIME
Introduced in December 2008
Sukuk or debt securities are listed on the Main
Market but will not be quoted and traded on
the Exchange
A shelf-listing platform for visibility and
profiling purposes.
The trading shall occur on OTC market What does LFX offer?
Profiling attracts wider source of funding
Why Listing?

Higher visibility and transparency

Offers listing of Based on both
Higher standards of regulatory framework
multi-currency conventional and
In depth liquidity through secondary market trading financial instruments Islamic principles
Reduces cost of capital

RM & Non-RM One-stop centre that

Listed & non- Sukuk/ debt
Application

listed issuers securities Web-based caters for all

Exchange, accessible applications and
to system 24 hours, approvals of listing,
Clear listing Fast approval 7 days a week trading, clearing and
requirements process settlement
20

10
 Sukuk as a Source of Infrastructure Financing
To-date, Malaysia has been a major issuer of infrastructure sukuk.
Issuers include government-related entities, as well as construction and
real estate players for the purpose of building highways, public
transportation structures, offices, hospitals and universities.
Sukuk Listing on Exempt Regime Sukuk Listing on LFX
from 2002 to 2014 (USD billion) from 2002 to 2014 (USD billion)

21
Source: Bursa Malaysia

Malaysia: A Key Marketplace for Global Sukuk

Malaysia continued to be the global sukuk market leader
2014 2013
Stock Exchange Number of Value Number of Value
Rank Rank
Sukuk (USD bil) Sukuk (USD bil)
Bursa Malaysia 1 20 34.16 1 20 32.88
London Stock Exchange 2 35 24.98 2 36 25.70
Irish Stock Exchange 3 34 22.20 3 22 12.65
Nasdaq Dubai 4 31 21.30 4 15 9.35
Singapore Exchange 5 16 8.59 6 12 7.00
Saudi Stock Exchange (Tadawul) 6 6 6.61 5 7 7.47
Labuan International Financial
7 9 6.00 7 9 6.85
Exchange (LFX)
Bursa Efek Indonesia 8 58 5.75 8 51 4.53
Hong Kong Exchanges & Clearing
9 5 4.61 10 4 3.61
Limited
Dubai Financial Market (DFM) 10 4 2.75 9 5 3.93
Bourse de Luxembourg 11 7 2.51 11 2 1.77
Bahrain Bourse 12 3 1.22 12 5 1.43
Vienna Stock Exchange 13 1 0.17 13 1 0.17
Kazakhstan Stock Exchange 14 1 0.07 14 1 0.07
22
Source: Bursa Malaysia

11
Electronic Trading Platform (ETP)
Reporting capability for OTC trading

2004 OTC trades reported on ETP:

March 2008 to December 2014
 The National Bond Market Committee
mandated Bursa Malaysia to develop
and operate an electronic trading
platform for the bond market.
 The key objectives of ETP are:
 Enhance price discovery and
dissemination
 Improve accessibility and liquidity
 Perform monitoring and
surveillance

2008
 ETP was successfully developed and
launched on 10 March 2008, replacing
the Bond Information and
Dissemination System (BIDS) operated
by the Central Bank of Malaysia.
 Bursa Malaysia engaged Korea
Exchange (KRX) based on their
experience developing the Korea
Treasury Bond Trading System (KTS)
for the Korean bond market. Source: Bursa Malaysia
23

EXCHANGE TRADED
BONDS & SUKUK
(ETBS)
___________________________________

12
 Exchange Traded Bonds & Sukuk (ETBS)

Wider Market
Offering
Accessibility &
Broader
Investors Base Framework
Efficient Price with Market
Discovery for Transparency &
Issuers & Formed
Market Governance
Structure

ETBS Exchange Traded Bonds & Sukuk

(ETBS) project was incepted as an
Market
Protection to Economic Transformation Project for
Greater Choice
of Investment
Encourage the Capital Markets, as well as an
Participation &
in Fixed Income
Promote initiative under Bursa’s Strategic
Products
Investor Intent as part of Bursa’s intention to
Sophistication
Retail Access to broaden the product diversity being
Bonds/ Sukuk offered by the Exchange.
Market

1. To provide a platform that enables the retail market to tap the growing capital market
2. To expand market capitalisation by creating more tradable alternatives
3. To create vibrancy and more liquidity in the Malaysian capital market
4. To strengthen Malaysia’s position as the global sukuk leader
2525

ETBS: An Introduction

What is ETBS?

Bonds in the past have only been available to institutions and high net
worth individuals (HNWI). Bursa has brought this product into the
exchange to enable retail to access.
ETBS, also known as bonds or sukuk, are fixed income securities that are
listed and traded on the stock exchange. ETBS are investment grade
instruments which are aimed at tapping investors whose risk appetite
tend to be more conservative and/or seeking diversity in the stock
market. ETBS are issued either by companies or governments (the issuer)
to raise funds for their requirements/ needs.
ETBS utilizes the same
mechanism as that of buying
and selling shares, in which
each investor needs to have
Exchange a trading account (with the
broker) and a Central
Depository System (CDS)
Investment Banks/ account.
Securities Firms/
Banks
Investors/ Traders
26

13
 Bonds/ Sukuk Issuance: Process Flow
OTC Market vs Exchange Traded Market

OTC Market Exchange Traded Market

Issuers

Approval Tender
Private Placement

Distribution

Listing/ Quotation
Issuances Main Market

Trading

Clearing & Linkage

Settlement
Fungible
Depository
27 27

Retail Investor: Buying & Selling ETBS

1. How to buy ETBS?

 Primary Market: Via subscription, similar to applying for an IPO
 Secondary Market: Similar to buying shares via brokers

2. How to sell ETBS?

 Similar to selling shares, via brokers
 If held until maturity, investor will get back the nominal value of
the bond on maturity date as well as the interest or dividend
payable

3. How to make money from ETBS?

 Earning interest/ dividend
 Capital gains – depending on market condition

4. Trading on the Exchange

All ETBS are listed on the “Bonds” Board

28

14
 A New Asset Class Launched in January 2013
Maiden Issuance by DanaInfra Nasional Berhad in February 2013 under its
RM21.0 billion Islamic Medium Term Note Sukuk Murabahah Programme for
the nation’s MRT Project
1st ETBS – Stock Code: 0400GA 2nd ETBS – Stock Code: 0400GB 3rd ETBS – Stock Code: 0400GC
Listing Date 8 February 2013 Listing Date 28 November 2013 Listing Date 27 August 2014

Maturity Date 8 February 2023 Maturity Date 31 October 2028 Maturity Date 23 July 2021
Tranche Value Tranche Value RM100 million Tranche Value RM100 million
RM300 million
Tenure Tenure 15 years Tenure 7 years
10 years
Yield Yield 4.58% p.a Yield 4.23% p.a
4% p.a
Subscription Rate Subscription Rate 219% Subscription Rate 103.95%
161%

Volume, Value and Closing Price as at 31 May 2015

29
Source: Bursa Malaysia

SHARIAH-COMPLIANT
COMMODITY TRADING
PLATFORM

___________________________________

15
 Bursa Suq Al-Sila’ (BSAS)

 Bursa Suq Al Sila’ (BSAS) is an initiative of

the Malaysia International Islamic
Financial Centre (MIFC)
 Supported by Bank Negara, Securities
Commission Malaysia and Bursa Malaysia to
further promote Malaysia as an
international Islamic financial hub
 Shariah compliant commodity trading
platform to facilitate Islamic financing by
applying the concept of Murabahah and
Tawarruq
 Housed in a Shariah-compliant wholly-
owned subsidiary of Bursa Malaysia – Bursa
Malaysia Islamic Services Sdn Bhd (BMIS)
31

Murabahah Commodity Trading Platform

 A multi-commodity and multi-currency commodity trading platform to

support murabahah transactions
 Members are governed by a set of trading rules encompassing best market
practices and Shariah principles
 Operates in a 15-hour 6-day market
 Five (5) approved commodities that can be traded on BSAS - Crude Palm Oil
(CPO), Refined, Bleached and Deodorised Palm Olein (RDB Palm Olein),
Plastic Resin (Polyethylene), Hardwood Timber and Softwood Timber, and
these can be traded in 22 currencies.

Members by Country:

 Brunei  Abu Dhabi  Kuwait

 Hong Kong  Bahrain  Saudi Arabia

Financing  Personal Financing
 Credit Card
 Malaysia  Dubai  United  Housing
Kingdom Sukuk Issuance
 Singapore  Jordan
Deposit Taking 32

16
 BSAS: Transactional Flow

Example : Islamic Bank A makes placement to Islamic Bank B

1 Islamic Bank A buys commodity

from a commodity supplier on spot

2 Islamic
Bank A sells
commodity
to Islamic
Bank B on
deferred
payment
basis
3 Islamic Bank B sells the 4 BMIS sells the
commodity to Bursa commodity
Malaysia Islamic Services back to the
(BMIS) market

 Bids and Offers are placed daily and trades are matched electronically
 Commodities are deliverable upon election of the purchaser
33

BSAS Growth Driven by Better Recognition

Higher ADV of BSAS trades and the growing acceptance of Murabahah and
BSAS by domestic banks and sukuk issuers
BSAS Market Highlights BSAS Average Daily Value (ADV)
 YTD 2015 Average Daily Value (ADV): RM12.13 bil
(Mar 2015: RM11.87 bil; 2014: RM6.9 bil)
 YTD 2015 Trading Value: RM982.83bil
(Total 2014: RM1,687.9bil)
 YTD 2015 Trading Revenue: RM11.21 mil
(2014: RM9.9mil)
 Largest Monthly ADV: RM12.83 bil (Apr 2015)
 Largest Trade in a Day: RM21.43 bil (6 Apr 2015)
 Largest Deal in a Day: RM6.9 bil (29 Jan 2015)

Total Commodity Trading Value: RM1,688 bil (2014)

Market Demography of BSAS Trading Value
YTD April 2015: RM982.83 bil

Source: Bursa Malaysia Islamic Services Sdn Bhd 34

17
 The Notable Bursa Suq Al-Sila’
World’s first Shariah-compliant commodity trading platform

Facilitate Islamic Multi-commodity and Demography of BSAS Registered Participants

financing by multi-currency
applying the concept 25 currencies
of Murabahah and Wider Market
Offering
Tawarruq Five (5) approved Accessibility
commodities: & Broader
Investors Base
Operates in a 15-  Crude Palm Oil (CPO)
hour 6-day market  Refined, Bleached
Members are and Deodorised Palm
governed by a set of Olein (RDB Palm
trading rules Olein)
encompassing best  Plastic Resin
market practices (Polyethylene) Domestic Foreign Total
and Shariah  Hardwood Timber CTPs 54 20 74
principles  Softwood Timber
CEPs 4 - 4
Bids and Offers are Commodities are
placed daily and deliverable upon CSPs 21 2 23
trades are matched election of the Total Participants 101
electronically purchaser
Source: Bursa Malaysia Islamic Services Sdn Bhd 35

Highlights & Achievement (as at September 2014)

86 Members of BSAS (as at September 2014)

(67 local and 19 foreign)

Since August 2009

 Largest deal:  Highest daily trade:

RM5.6 billion RM50.6 bil
(18 Jan 2013) (Sep 2014)
 Total sukuk value  Highest monthly ADV:
issued on BSAS RM8.8 bil (Sep 2014)
RM53.4bil

 ADV trade of RM5.8 bil in September 2014

36

18
 SHARIAH-COMPLIANT
PRODUCT PERFORMANCE
Diverse
Building Capital
Multinational

Fuelling Growth

Harmonisation of
Islamic Market
Sustainable

How did Shariah-compliant Securities Perform

The Shariah-compliant regime getting stronger
2010 2011 2012 2013 2014 May 2015
Total Market Capitalisation – Shariah 803.2 809.6 945.9 1,044 1,028 1,064
(RM bil) (63.8%) (63.7%) (65.2%) (62.1%) (63.0%) (63.5%)
Total ADV OMT – Shariah 918 1,088 1,042 1,269 1,331 1,326
(RM mil) (66.7%) (68.0%) (69.8%) (69.7%) (68.6%) (67.6%)
994 1,134 1,106 1,453 1,396 1,392
Total ADV OMT+DBT – Shariah (RM mil)
(66.6%) (67.3%) (69.9%) (71.2%) (68.3%) (67.6%)
Total Number of Shariah-compliant 849 837 819 652 685 674
PLCs (88.1%) (88.7%) (88.3%) (71.3%) (75.6%) (74.6%)
Total Number of Shariah-compliant 846 837 817 657 693 683
Counters (PLCs + REITS + ETBS + ETFs) (86.7%) (87.1%) (86.7%) (70.2%) (73.3%) (73.6%)

Yearly Trend

944 927
915 906 903

Source: Bursa Malaysia

38

19
 Top 10 Active Stocks in 2014

Key point to note: All of them are Shariah-compliant

Stock Traded Volume Market Capitalisation Shariah-
Counter Market Sector
Code (unit) (RM) Compliant

1. 1201 Sumatec Resources Bhd Main Market Trading/Services 17,475,608,701 713,952,541.63 Yes

2. 6254 PDZ Holdings Bhd Main Market Trading/Services 13,697,273,471 121,704,979.20 Yes

3. 3786* Malaysian Airline System Bhd Main Market Trading/Services 13,653,529,897 4,428,357,018.00 Yes

4. 7013 Hubline Bhd Main Market Trading/Services 7,010,537,415 130,189,227.76 Yes

5. 0010 Iris Corporation Bhd ACE Market Technology 6,258,793,331 510,041,938.50 Yes

6. 7164 KNM Group Bhd Main Market Industrial Products 6,196,260,238 803,127,469.48 Yes

7. 5220 Globaltec Formation Berhad Main Market Industrial Products 6,166,905,936 376,721,653.77 Yes

8. 7219 Minetech Resources Bhd Main Market Industrial Products 5,959,872,385 79,811,280.00 Yes

9. 0150 Asia Bioenergy Tech Bhd ACE Market Trading/Services 4,845,133,113 105,050,000.00 Yes

10. 0096 Nexgram Holdings Berhad ACE Market Technology 4,712,127,962 131,819,413.60 Yes

TOTAL 85,976,042,449 7,400,775,521.94

* Stock Code 3786 MALAYSIAN AIRLINE SYSTEM BHD was delisted on 31 December 2014.
The market capitalization disclosed is market capitalization on the last trading day of the stock on 30 December 2014 .

39
Source: Bursa Malaysia

2014: 12-month Index Performance & Growth

Both the FBM EMAS Shariah Index and the FBM Hijrah Shariah Index have
consistently outperformed the FBM KLCI ~ “2014 Outlook & Lookouts”, Maybank IB Research, 23 December 2013 ~

Index Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

1,804.02 1,835.65 1,849.21 1,871.52 1,873.38 1,882.71 1,871.35 1,866.1 1,846.31 1,855.14 1,820.89 1,761.25
FBM KLCI

12,604.02 12,895.61 13,146.17 13,214.49 13,136.04 13,387.34 13,383.98 13,219.73 13,185.84 13,346.36 13,036.26 12,507.02
FBM Emas Shariah

13,823.34 14,139.28 14,388.30 14,510.93 14,446.10 14,718.65 14,604.52 14,485.51 14,460.59 14,923.94 14,942.25 14,468.70
FBM Hijrah Shariah

14,653.15 15,510.91 14,146.52 16,419.97 16,462.12 16,939.69 17,856.21 17,397.7 17,407.24 16,561.32 15,194.18 13,870.23
FBM Small Cap Shariah

FBM Palm Oil Plantation 18,123.28 18,888.74 19,421.45 19,857.63 20,029.47 20,060.35 19,496.08 18,629.78 18,510.73 18,968.93 18,336.86 16,977.01

Source: Bursa Malaysia 40

20
 Index Performance & Growth
Amid a gloomy outlook worldwide in 2014, FBM Hijrah Shariah Index
remained sturdy and outperformed other indices.

Year-end
Index
2010 2011 2012 2013 2014 YTD May 2015
FBM KLCI 1,518.91 1,530.73 (0.78%) 1,688.95 (10.34%) 1,866.96 (10.54%) 1,761.25 (-5.66%) 1,747.52 (-0.78%)
FBM Emas
10,058.15 10,300.29 (2.41%) 11,520.73 (11.85%) 13,051.59 (13.29%) 12,507.02 (-4.17%) 12,576.45 (0.56%)
Shariah
FBM Hijrah
10,456.86 11,022.63 (5.41%) 12,674.93 (14.99%) 14,323.63 (13.01%) 14,468.70 (1.01%) 14,337.46 (-0.91%)
Shariah
FBM Small
- - 10,482.56 14,645.47 (39.71%) 13,870.23 (-5.29%) 15,038.27 (8.42%)
Cap Shariah
FBM Palm Oil
15,481.09 16,519.75 (6.71%) 16,768.74 (1.51%) 18,464.55 (10.11%) 16,977.01 (-8.06%) 15,819.10 (-6.82%)
Plantation

Source: Bursa Malaysia 41

Supply & Demand for Shariah-compliant

Products
Greater foreign participation is envisaged, especially with the recent
streamlining of the revised screening methodology to better reflect
international practices

Shariah-compliant Domestic & Foreign

Issuers Products
products Investors

PLCs/ Equities S IFMCs

Non-PLCs S C i-Stocks Retail
Indices Islamic
H R i- Indices
Investment UTFs HNWI
Banks A E
ETFs
R E i-ETFs Investors FMCs
Fund with
Arrangers
REITs I N
i-REITs Islamic UTFs
A I mandates
GLICs Warrants
H N Sukuk Wealth
SPV Loans/ G Managers
Companies Debenture
Institutions
Government Bonds/
Sukuk
42

21
 The Growth of Islamic Funds Industry
The global Islamic funds industry Malaysia’s Islamic funds industry has
has progressed tremendously demonstrated impressive growth
Global Islamic Fund Assets
1,161
active funds

Sep
RM billion 2010 2011 2012 2013
2014
The market is led by Saudi Arabia and Malaysia which
together held 65% of Shariah-compliant AUM Islamic AUM 48.0 64.2 79.6 97.5 109.2
Islamic Funds Assets by Country: 2013 Total Fund
Management 377.0 423.3 505.1 588.4 633.3
Industry
% Islamic AUM
to Total 12.7% 15.2% 15.8% 16.6% 17.2%
Industry

Note:
 IFMC: Islamic Fund Management Companies
 Islamic AUM comprises AUM of IFMCs and Islamic
Windows
Data includes assets that are sourced from collective
investment schemes and private mandates 43
Source: Zawya, Bloomberg, Eurekahedge, KFH Research Source: Securities Commission Malaysia

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