Bursa CMH debuts with RM200m trade

Written by Isabelle Francis

Tuesday, 18 August 2009 11:30

KUALA LUMPUR: BURSA MALAYSIA BHD []’s newly launched syariah-based commodity trading platform saw some RM200 million worth of transactions on the first day of trading yesterday.

“So far we have done just below RM200 million today and that is within expectation. We hope this will build up over time,” Bursa CEO Datuk Yusli Mohamed Yusof told reporters after the launch of the Commodity Murabahah House (CMH).

The CMH, called Bursa Suq Al-Sila’, provides Islamic financial institutions with an alternative to syariah-based financing using commodity as the underlying asset.

As crude palm oil (CPO) is made the first underlying commodity, the platform is expected to benefit participating suppliers as they are ensured of delivery of the CPO.

Bursa earns a trading fee of RM30 per every RM1 million transaction done on the platform.

This means, on the first day, it potentially earned some RM6,000 from the RM200 million trading done, but Yusli expects volume to pick up.

“We will open up this platform to other commodities and to other currencies. With that, we do expect the volume to pick up,” he added.

He said Bursa Suq Al-Sila’ had so far roped in over 26 commodity suppliers, financial institutions and trading participants. He added that CIMB Islamic Bank Bhd was the first to do trading on the platform.

Yusli said while the platform would allow foreign currency-based trading by year-end to attract foreign players, it was already in talks with other commodity players to participate in the CMH, including those in the automotive sector.

Bursa’s global head of Islamic capital markets, Raja Teh Maimunah Raja Abdul Aziz, named electronic goods and soft commodities such as rubber as the other trade possibilities on Bursa Suq Al-Sila’.

Meanwhile, CIMB Islamic executive director and CEO Badlisyah Abdul Ghani said in 2008, the bank undertook some RM3 billion worth of CMH trading monthly and a total of RM6 billion so far, this year.

“The idea is from today onwards our trading will be done through the Bursa’s CMH,” he added.

The Bursa Suq Al-Sila’ platform involves one party buying commodity at a certain cost and selling it to a customer at a cost plus profit. The customer will then pay the amount and the profit to the party on a deferred payment basis. The customer then sells the commodity on spot for cash.

In the present case, trading on Bursa Suq Al-Sila’ involves the sale and purchase of real physical CPO and therefore the prices of CPO would be benchmarked against the previous trading

day settlement of the FCPO spot month contract.

This article appeared in The Edge Financial Daily, August 18, 2009.

Onsys Energy to buy 4 more ships by next March< Prev		Next >#Update* Ekuinas to unveil business model soon

Last Updated on Tuesday, 18 August 2009 11:33

Sorry, you cannot post a comment unless you are a registered user.

JComments

Categories

Other Publications & Pullouts