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Bursa Malaysia and KRX: Support of the Malaysia International Islamic Financial Centre’s Initiative aims to boost Growth of Islamic Finance Market- Event 19.11.2009

The Korea Exchange (KRX) and Bursa Malaysia will be playing host to the Korean investment bankers, advisers, issuers and institutional investors at its inaugural KRX-Bursa Malaysia Islamic Capital Market Conference, which will be held on 19 November 2009 in Seoul, Korea. This conference which is co-organised in support of the Malaysia International Islamic Financial Centre (MIFC) initiative, aims to share Malaysia’s Islamic finance experience and to promote the opportunities in the Malaysian Islamic capital market landscape. This collaborative effort hopes to strengthen the growth opportunities of Islamic finance amongst the discerning Korean investors and issuers.

This conference is timely as there is a strong interest for Korea to grow the Islamic finance industry, following from the proposed liberalisation measures by the Korean government which are aimed to allow the issuance of Islamic bonds or sukuk as well as allow incomes from sukuk to be tax-exempted. These proposed laws are expected to be passed by the Korean government’s National Assembly later this year.

In conjunction with the KRX-Bursa Malaysia Islamic Capital Market Conference, delegates of the MIFC initiative, which comprises senior management of Bank Negara Malaysia (Central Bank of Malaysia), Securities Commission Malaysia and Bursa Malaysia, will be participating in the conference. Malaysia acknowledges Korea as a potential Islamic financial market and welcomes Korea’s participation in shaping the Islamic finance landscape together, via leveraging on Malaysia’s more than 30 years of experience in developing the world’s most comprehensive Islamic financial system.

Chief Executive Officer of Bursa Malaysia Berhad, Dato’ Yusli Mohamed Yusoff said, “We hope this conference will stimulate interest in the Shari’ah compliant products which are currently in demand from investors who are seeking returns from alternative and ethical investments. In addition, this visit by the delegates from the MIFC will pave the way for more opportunities to exchange ideas in Islamic finance and forge greater working relations between Korea and Malaysia for the interest of growing this important industry. We are confident that the Malaysian and Korean authorities as well as KRX and Bursa Malaysia would be able to leverage on our respective strengths in the establishment of an Islamic capital market in Korea.”

This KRX-Bursa Malaysia Islamic Capital Market Conference is expected to attract 200 participants and will provide a platform for all attendees to gain an insight into the outlook and trends of Islamic capital markets. Key discussion topics will centre around the liberalisation of Islamic financial markets, investment and business opportunities in Islamic capital market, the Islamic finance landscape and framework as well as the growth of Islamic finance products in Asia and globally.

Source: MondoVisione, 16.11.2009

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Filed under: Asia, Events, Exchanges, Islamic Finance, Korea, Malaysia, News, Services, , , , , , , , , , ,

Bursa Malaysia introduces Direct Market Access for Equities Marke

Bursa Malaysia today introduced Direct Market Access (DMA) for the equities market which is aimed to enhance trading efficiency and accessibility for market participants. With this, the Exchange will be providing a complete DMA infrastructure for both the equities and derivatives markets. The DMA for derivatives market was successfully launched in April 2008.

Bursa Malaysia Berhad’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff said, “DMA is a critical component for Bursa Malaysia to remain competitive in the global investment arena. We are committed to investing in the right technologies to promote market accessibility and liquidity, as well as increased trading efficiencies. This will enable us to meet the requirement for growth and alignment with international trading practices.”

“We are confident that similar to our experience with DMA derivatives, DMA equities will attract new segment of trading participation given its increased accessibility and low latency. Market participants will also be able to enjoy greater connectivity and more control of their orders via the DMA infrastructure for equities market,” he added.

The benefits of DMA:

  • It is a ‘zero-touch electronic trading’ solution which enables investors to route orders directly to the Exchange for immediate execution.
  • It will significantly reduce the time for orders to be sent and matched from the previous average of three (3) seconds per transaction to a fraction of a second.
  • It has the ability to support algorithmic and block trading which allows institutional investors greater control through using pre-determined order conditions.
  • It provides greater access to international investors as Bursa Malaysia allows ‘Sponsored Access’ for institutional investors.
  • It enables market participants to connect their own trading front-end to the Financial Information Exchange (FIX) DMA Gateway.
  • It allows market participants to install their own servers in the Exchange’s data centre through the co-location hosting service where faster order management can be processed and lower latency when trading.

For further information and details on DMA Equities, please contact Bursa Malaysia via email at DMA@bursamalaysia.com

Source: Bursa Malaysia, 09.11.2009

Filed under: Asia, Data Management, Exchanges, FIX Connectivity, Malaysia, Market Data, News, Trading Technology, , , , , , , , , ,

Malaysian Shari’ah-compliant commodity trading platform goes live

Malaysia’s position as a leading Islamic financial hub was further solidified today with the successful commencement of trade on the world’s first, end-to-end Shari’ah-compliant commodity trading platform.

This fully-electronic platform, called Bursa Suq Al-Sila’, is an international commodity platform that is able to facilitate commodity-based Islamic financing and investment transactions under the Shari’ah principles of Murabahah, Tawarruq and Musawwamah. The launch commodity is Malaysia’s star product, crude palm oil (CPO).

Formerly known as Commodity Murabahah House, Bursa Suq Al-Sila’, which means commodities market in Arabic, is an initiative spearheaded by the Malaysia International Islamic Finance Center (MIFC). The trading platform is operated by Bursa Malaysia via its fully Shari’ah-compliant wholly-owned subsidiary, Bursa Malaysia Islamic Services Sdn. Bhd.

YB Dato’ Seri Ahmad Husni Hanadzlah, the Malaysian Finance Minister II, was on hand to unveil the Bursa Suq Al-Sila’ brand and witness its inaugural trading day. Also present at the ceremony were YB Dato’ Hamzah Zainudin, Deputy Minister of Plantation Industries and Commodities, YBhg. Tan Sri Dato’ Sri Dr. Zeti Akhtar Aziz, Governor of Bank Negara Malaysia, YBhg Datuk Ranjit Ajit Singh, Managing Director of the Securities Commission as well as senior officials of Bank Negara, the Securities Commission and Bursa Malaysia.

Dato’ Yusli Mohamed Yusoff, Chief Executive Officer of Bursa Malaysia, said, “It was indeed a good start for Bursa Suq Al-Sila’. This innovative platform would not have become a reality if not for the support and participation of industry players across the board.”

Dato’ Yusli added, “Bursa Suq Al-Sila’ is indeed one-of-its-kind as it is the world’s first Shari’ah-compliant commodity trading platform specifically designed to facilitate Islamic finance. It is expected to also enhance liquidity management for Islamic Financial Institutions. Commodity suppliers such as Crude Palm Oil suppliers are also provided with an additional revenue source.”

According to Dato’ Yusli, Bursa Suq Al-Sila’ complements the money and capital markets as a whole. This trading platform is poised to strengthen Bursa Malaysia’s edge in the global Islamic market place.

The trading in Bursa Suq Al-Sila’ today follows the recent signing of Memorandum of Participation between Bursa Malaysia and over 26 commodity suppliers, financial institutions and trading participants three weeks ago.

The essence of Bursa Suq Al-Sila’, which embraces the commodity Murabahah concept, involves one party buying commodity at a certain cost and selling it to a customer at a cost-plus-profit basis. The customer will then pay the amount and the profit to the party on a deferred-payment basis. The customer then sells back the commodity to the commodity market on spot for cash. The trade involves the sale and purchase of real physical assets.

In the initial stage, crude palm oil will be used as the launch commodity. Eventually, this will expand to other Shari’ah approved commodities covering both soft and hard commodities. Similarly, initial trades in Bursa Suq Al-Sila’ will be conducted in Ringgit Malaysia-denominated. As Bursa Suq Al-Sila’ is multi-currency capable, non-RM trades will be introduced in the foreseeable future to provide for international market players. This in turn will provide more choices, access and flexibility for international financial institutions to participate in this market.

Dato’ Yusli concluded, “With Bursa Suq Al-Sila’, we are now diversifying our offerings and extending our traditional businesses with a Shari’ah platform focused on money markets. As an exchange, Bursa Malaysia is committed to support, manage and even drive initiatives that can augment the growth of the Malaysian Islamic market.”

Source: Bursa Malaysia, 17.08.2009

Filed under: Asia, Exchanges, Islamic Finance, Malaysia, News, Services, , , , , , , , , ,

Bursa Malaysia and CME Group in derivatives partnership

In line with the Prime Minister of Malaysia, Dato’ Sri Najib Tun Abdul Razak’s acknowledgement on Bursa Malaysia Berhad’s (Bursa Malaysia) cooperative efforts with CME Group Inc (CME Group) to develop a robust derivatives market, the two exchanges announced today that they are working towards a collaboration involving trade matching services, product licensing and minor cross-equity investments.

The CME Group equity stake will relate to Bursa Malaysia’s derivatives business. Specific terms will be announced at a later date. Both parties announced that this initiative is subject to regulatory approval.

With this strategic partnership, CME Group will use Bursa Malaysia’s RM-denominated CPO futures contract (FCPO) settlement prices, which will enable CME Group to develop a USD-denominated cash-settled CPO futures contract and its related options for listing on one of CME Group’s US registered exchanges. This product is expected to be traded on CME Globex, which is CME Group’s electronic trading platform.

Dato’ Yusli Mohamed Yusoff, Chief Executive Officer of Bursa Malaysia, said, “The proposed collaboration is not only timely but also necessary as it would contribute to the overall growth of the Malaysian capital market. It is also aimed at globalising the Malaysian crude palm oil (CPO) futures market. Consequently, part of this proposed collaboration will enable Bursa Malaysia Derivatives to list its derivatives products on CME Globex. Through this collaboration, we expect the resulting expertise and knowledge transfer to further facilitate our goal for a robust derivatives exchange.”

“This initiative, when implemented, will enable our customers from other markets to access Bursa Malaysia’s derivatives markets and products on CME Globex, the leading and most widely distributed electronic trading platform in the world, further demonstrating our flexibility to operate in multiple jurisdictions for the benefit of customers worldwide,” said Terry Duffy, Executive Chairman of CME Group.

“Our proposed strategic partnership with Bursa Malaysia will further enhance our globalisation efforts by facilitating our customers’ efficient access to Bursa Malaysia’s important markets,” said Craig Donohue, Chief Executive Officer of CME Group. “This proposed partnership will allow us to continue to expand our transaction processing business opportunities, increase our presence in Asia, as well as help our Malaysian partners grow their business.”

Source: CME 11.08.2009

Filed under: Asia, Exchanges, Malaysia, News, , , , , , , , ,

Bursa Malaysia Inks Commodity Murabahah Agreement With Industry Players Under MIFC Initiative – Multi-Commodity, Multi-Currency Trading Platform To Facilitate Shariah-Based Financing And Liquidity Management

Bursa Malaysia and over 26 palm oil commodity suppliers, financial institutions and trading participants, today signed a Memorandum of Participation to collaborate in the Shariah commodity trading platform, Commodity Murabahah House (CMH), which is aimed at facilitating liquidity management and the financing of Islamic financial and investment instruments.

Commodity Murabahah House (CMH), a Malaysia Islamic International Finance Centre (MIFC) initiative operated by Bursa Malaysia’s fully Shariah compliant wholly-owned subsidiary, Bursa Malaysia Islamic Services Sdn Bhd, is an international spot commodity platform which facilitates commodity-based Islamic financing and investment transactions under the Shari’ah principles of Murabahah, Tawarruq and Musawwamah. Initial trades will use crude palm oil to be followed by other Shari’ah approved commodities covering both soft and hard commodities. At present, trades will be Ringgit-denominated whilst efforts are being undertaken to make it multi currency capable, providing more choice, access and flexibility for international financial institutions to participate in this market.  This trading platform, which is fully electronic, is the world’s first end-to-end Shari’ah-compliant commodity trading platform designed with the main purpose of serving the Islamic financial markets.

Dato’ Yusli Mohamed Yusoff, Chief Executive Officer of Bursa Malaysia said, “We are the first in the world to innovate a Commodity Trading Platform infrastructure using crude palm oil as the underlying commodity.  We expect the innovation of this web-based and fully automated platform to change the way most Islamic financial institutions transact commodity murabahah going forward.

This infrastructure is set to complement our capital and money market offerings. The players, which range from financial institutions, CPO producers to trading participants, will benefit from additional revenue stream, stemming from the low liquidity risk element that is apparent in the financing structure of CMH.”

Dato’ Yusli added, “The implementation of CMH, planned for August this year, is in line with our efforts to further spur the development of the Islamic market in Malaysia. We are confident that this will give Bursa Malaysia the stature to bring forth its Islamic market’s offerings to the global front.”

Commodity Murabahah is widely used as a money market tool by Islamic banks in the GCC. The concept of Commodity Murabahah involves one party buying commodity at a certain cost and selling it to a customer at a cost-plus-profit basis. The customer will then pay the amount and the profit to the party on deferred-payment basis. The customer then sells back the commodity to the commodity market on spot for cash. The trade involves the sale and purchase of real physical assets.

Source: MondoVisione, 29.07.2009

Filed under: Asia, Exchanges, Islamic Finance, Malaysia, News, Services, , , , , , , , ,

Asian Exchanges: Opportunities in Asia’s SouthEast Asian Markets

MALAYSIA-With the financial crisis expected to slow technology adoption throughout the Asia-Pacific region in the coming year, many are expecting some of Asia’s smaller exchanges to play a growing role in the market.

The Vietnam, Thailand and Malaysia exchanges, for example, lag behind some of their neighbors in terms of trading technology. These markets lack some of the basics, and technology vendors in the region will benefit as they fill in the gaps.

Malaysia introduced a new trading platform in early December aimed at improving latency and allowing traders to access the exchange electronically. “As the Malaysian marketplace progresses, we must leverage new technologies to allow market users and investors access to more trading opportunities,” says Dato’ Yusli Mohamed Yusoff, CEO of the Bursa Malaysia Berhad. As the exchange goes, local brokerages will likely follow suit, adopting new technologies to stay competitive.

Traders and technology vendors also have their eyes on Vietnam and Thailand. GL Trade is planning on adding Thailand to its own DMA platform in 2009, going through local brokerage Seamico Securities Public Company Ltd.

Vietnam operates with an electronic matching system, but traders are still waiting for the exchange to improve its communication with brokerages. Other small exchanges are expected to come on the scene in 2009, including the Cambodian Stock Exchange, a joint venture between the Korea Exchange and the Cambodian government. The exchange may be small, but for technology vendors, the new markets will help keep sales up in tough times.

Source: Watersonline by Lauren Hilgers, 06.01.2009

Filed under: Exchanges, Indonesia, Malaysia, News, Singapore, Thailand, Trading Technology, Vietnam, , , , , , , , , , , , ,

Bursa Malaysia new Securities Trading Platform live

Bursa Malaysia today successfully launched its Bursa Trade Securities trading platform. The launch of this trading platform for the equities market will provide greater accessibility for both local and international investors, as well as enhance trading efficiency and transparency in the market. The first phase of Bursa Trade was implemented in 2006 for the derivatives market.  Bursa Trade is powered by the NSC® trading system from NYSE Euronext.

Bursa Malaysia Berhad’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff said, “Today’s successful launch is the culmination of months of preparation which included internal and external-user testing to ensure a smooth and seamless migration. The successful implementation was certainly made possible by the steadfast support of our market participants who had spent a significant number of hours in working together with us in testing the new trading system.”

According to Dato’ Yusli, greater speed, access and control in trading is a notable trend in global exchanges today. “As the Malaysian marketplace progresses, we must leverage on new technologies to allow market users and investors access to more trading opportunities,” he added.

Stanley Young, NYSE Euronext’s Co-Global Chief Information Officer said, “We congratulate Bursa Malaysia on this landmark launch. This platform positions Bursa Malaysia on par with major international exchanges in terms of speed and functionality, but more importantly, gives Bursa Malaysia the flexibility to bring new products and services to the market.”

Dato’ Yusli added, “As with any highly complex technological system, there are always inherent risks. The exchange will be vigilantly monitoring the new trading system for stabilisation to avoid and minimise any possible disruption.”

Some of the key features of Bursa Trade Securities include:

Theoretical Opening Price (TOP)

Investors will be able to have ‘viewing ability’ of the theoretical opening prices for each stock under the pre-opening phase from 8:30am until the market opens for trading at 9am, as well as in the second session. The pre-opening price process enables real-time calculation of stock prices for first matching at opening phase. This allows investors to gauge market sentiment and prices better as the pre-opening period is made transparent. This is particularly useful for new listings.

Theoretical Closing Price (TCP)

This transparency of trading extends to the moment the market is about to end for both the first and second trading sessions. The theoretical closing price feature promotes natural discovery of closing prices for each session.

Trading At Last (TAL)

The last 10 minutes of each session will provide traders with the opportunity to close their positions. Matching will take place at a fixed price which will be either the last done price or the theoretical closing price.

Continuous trading

Bursa Trade Securities enables real-time and continuous matching of orders compared to 10 seconds matching under the current system. This makes the online trading experience faster and much more responsive.

Five best price limits

Investors would find this feature beneficial as it provides them with a clearer picture of market depth. The five-best price limits give investors more control of their trading decisions as opposed to the three-best price limits that is offered by the current system.

Odd Lots Matching

Investors will now be able to do partial matching for odd lots which makes it more marketable. Odd lots can be partially matched based on price time priority.

Final Settlement Price for FKLI and OKLI

The implementation of Bursa Trade Securities will also have an impact on the derivatives market. There will be a change in the calculation of the Final Settlement Price (FSP) methodology for the derivatives products carrying the Kuala Lumpur Composite Index (KLCI) as the underlying instrument. The products affected will be the KLCI futures (FKLI) and the KLCI options (OKLI). This new methodology makes it less susceptible to market manipulation and smoothens out price volatility.

To know more about Bursa Trade Securities, log on to http://www.bursamalaysia.com

Source: Bursa, 01.12.2008

Filed under: Exchanges, FIX Connectivity, Malaysia, News, Trading Technology, , , , , , , , , , , , ,

Bursa Malaysia And KRX Korea Exchange Sign Agreement To Develop Commodity Murabahah House Infrastructure

Bursa Malaysia Berhad (Bursa Malaysia) and Korea Exchange (KRX) recently signed an agreement to develop the infrastructure for the Commodity Murabahah House (CMH), an international spot commodity platform which operates under Shariah requirements.

Under the implementation agreement, the CMH infrastructure will be developed by the two exchanges and will have the capacity to potentially shape the landscape of the Malaysian Islamic capital market.

Dato’ Yusli Mohamed Yusoff, Chief Executive Officer of Bursa Malaysia said, “A well established CMH infrastructure will give Bursa Malaysia the stature to bring forth Islamic capital market and its offerings to the global front. KRX has certainly demonstrated their capability for high delivery and credibility in developing world-class infrastructure as exemplified in our collaboration with KRX on the electronic trading platform for the bonds market. With the CMH, both countries can use the strength of its inventories as asset classes in improving the cash flow of the local distributors, thus reducing their holding cost. This tie up will also allow Islamic investors and issuers to provide critical mass of capital to trade new products.”

Chang Ho Lee, President of Korea Exchange said, “This CMH project has been initiated to further complement Malaysia’s aspiration in becoming an Islamic financial hub. In this respect, KRX is pleased to have the opportunity to contribute to this remarkable project. This arrangement will witness the collaboration of KRX’s technical expertise in developing various trading systems and Bursa Malaysia’s capabilities in offering innovative Islamic capital market products.”

Source: Bursa Malaysa, 12.11.2008

Filed under: Exchanges, Islamic Finance, Korea, Malaysia, News, Trading Technology, , , , , , , , , , , , , ,