Wednesday, June 29, 2011

What is SUKUK

SUKUK is one of the platform for investors to invest in Islamic securities. Below are the fundamental of SUKUK.... 

Sukuk is the Arabic term for Islamic securities. The literal meaning of sukuk is certificate. Technically sukuk refer to securities, notes, papers or certificates, with features of liquidity and tradability. 

The sukuk are structured based on the specific contract of exchange of Shariah-compliant assets. Such contracts can be made through the sale and purchase of an asset based on deferred payment, leasing of specific assets or participation in joint-venture businesses. Hence, the issuance of sukuk is not an exchange of paper for money with the imposition of an interest but rather an exchange of Shariah-compliant asset for some financial consideration applying various Shariah principles, such as bai' bithaman ajil (BBA), murabahah, ijarah, mudharabah and musharakah that allow the investors to earn profits from the transactions. 

The issuance of sukuk is regulated by the SC through the framework provided under the Guidelines on the Offering of Islamic Securities (Guidelines). The structure of sukuk must be confirmed and approved by a Shariah adviser who is appointed by the issuer. A Shariah adviser can be an independent Shariah adviser approved by the SC or a Shariah committee attached to a financial institution that operates Islamic banking activities approved by BNM. 

Malaysia pioneered the development of the global sukuk market with the launch of the first sovereign five-year global sukuk worth US$600 million in 2002. Since then our sukuk market has experienced unprecedented growth with Malaysia firmly established as one of the largest issuers of sukuk over the years. 


Friday, April 1, 2011

Malaysian Government Securities (MGS)

Pointed out in our P2112 chapter 7 on money market instruments, below are the list of MGS prices (some of it. For full view, you can refer to BNM webpage )

MGS Indicative Price
Price List (RM 274,992.65 mil / 274,992,650,000.00) as at 01/04/2011
Stock CodeCoupon RateMaturity DateAmount (RM)Coupon Pay- ment DatePeriod To Run:Ind. Mid. PriceGross Yield (%)Flat Yield (%)
MJ0500043.756028/04/201118,261.4628/04 28/100.00.9100.072.76243.7534
MN01001V3.833028/09/201118,718.0028/03 28/090.05.9100.462.88733.8154
MG0900032.711014/02/20126,500.0014/02 14/080.010.599.792.95122.7167
MJ0600053.718015/06/201212,563.1915/06 15/121.02.5100.843.00103.6870
MH0900012.509027/08/201214,000.0027/02 27/081.04.999.253.05482.5280
MW91003Z8.500030/11/20121,000.0031/05 30/111.08.0108.653.12487.8233
MN02002V4.053004/12/20123,000.0004/06 04/121.08.2101.503.12783.9931