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Asia and Latin America News Network focusing on Financial Markets, Energy, Environment, Commodity and Risk, Trading and Data Management

Commodity Webinar: How to access China? A Foray into the Chinese Capital Markets

With the opening of the financial markets in China, trading firms from around the world are increasingly interested in the these markets. While the volumes at the three commodity exchanges in Dalian, Shanghai, and Zhengzhou dropped to 470 million lots in the first six months of 2011, compared to 762 million in the same period in 2010, trading opportunities in the world’s biggest commodity markets are plentiful.

Our distinguished speakers will not only share their knowledge about the Chinese market structure, the participants and trading opportunities, but equally important, they will explain how to capture those opportunities in a jungle of regulations, cultural differences and technological challenges. How to access China successfully.

Please join us for this webinar moderated by Chris Hall, Editor in Chief, THE TRADE (ASIA) on Thursday, September 29th at

10am Chicago   4pm London    11pm Shanghai

Panelists
Nick Ronalds, Executive Director, FIA Asia
Dean Owen, Chief Representative & SVP, China, Newedge
Steffen Gemuenden, CEO, RTS Realtime Systems

Who should attend? Firms looking to capture opportunities in the Chinese Derivatives markets including:
• Proprietary Trading firms
• Hedge Funds
• Brokers
• Supply Chain Management firms

Please register here.

This webinar is free to attend. Please feel free to send this invitation to interested colleagues.

*If this timing does not work for you, please still register for the webinar. A recording will be made available to all who register.

Filed under: Asia, China, Energy & Environment, Events, 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, , , , , , , , ,

New FTSE Bursa Malaysia Palm Oil Plantation Indices To Boost Exchange’s Standing As Key Commodity Centre

Bursa Malaysia Berhad (Bursa Malaysia) and award winning global index provider, FTSE Group (FTSE), today announce the launch of the FTSE Bursa Malaysia Palm Oil Plantation Index Series. This series enables investors to gain exposure to the long term growth potential of the lucrative, billion dollar palm oil industry, both in Malaysia and the Asian region. This is one further step to cement Bursa Malaysia’s position as a key centre for commodities-related capital market offerings.

The three indices launched today are the:

  1. FTSE Bursa Malaysia Palm Oil Plantation Index in Ringgit Malaysia based on the FTSE Bursa Malaysia EMAS universe;
  2. FTSE Bursa Malaysia Asian Palm Oil Plantation Index in Ringgit Malaysia; and
  3. FTSE Bursa Malaysia Asian Palm Oil Plantation Index in US Dollars.

Both Asian related palm oil plantation indices are based on the universes of developed, advanced emerging and secondary emerging countries as classified by FTSE in the Asia Pacific region excluding Japan, Australia and New Zealand, and are available in gross and net of tax versions.

These three indices allow investors to track the performance of listed companies which derive substantial revenues from palm-oil related activities. The series also supports the creation of Exchange Traded Funds (ETFs), structured products and other index-linked investment instruments.

Chief Executive Officer of Bursa Malaysia, Dato’ Yusli Mohamed Yusoff said, “The introduction of these new palm oil plantation indices is an exciting opportunity that will complement and strengthen Malaysia’s existing position as a significant player in the global palm oil industry. These palm oil plantation related indices will complement our strong footing in palm oil commodities related sector and strengthen our crude palm oil futures market as it bridges between the cash and derivatives markets for hedging and arbitraging opportunities. In short, the new indices elevate the profile of Malaysia’s palm oil industry and also establish Bursa Malaysia as a centre for commodity trading.”

Paul Hoff, Managing Director, Asia Pacific for FTSE Group said, “We are seeing evidence of increased interest in agricultural/commodity investment as investors look for niche opportunities. We are pleased to be working with Bursa Malaysia again, this time to develop the FTSE Bursa Malaysia Palm Oil Plantation Index Series to capture this unique sector.”

For more information on FTSE Bursa Malaysia Palm Oil Plantation Index Series, please visit http://www.bursamalaysia.com/website/bm/market_information/ or www.ftse.com/bursamalaysia.

Source:MondoVisione, 18.05.2009

Filed under: Asia, Data Vendor, Exchanges, Islamic Finance, Malaysia, News, , , , , , , , ,

Tokyo Commodity Exchange’s Response To New Influenza

At Tokyo Commodity Exchange Inc. (TOCOM or “the Exchange”) , Risk Management Committee has decided earlier this month to formulate an action plan in response to the occurrence and spread of the new influenza along with the government’s announcement based on its “New Influenza Response Plan”.

According to its own action plan, the Exchange has been implementing the collection of the latest information on infections, heads-up to the employees, cancellation of some of the overseas business travels. With regard to the trading session, however, TOCOM intends to maintain its normal operation. At present TOCOM does not plan to suspend the trading session, as some reported earlier today.

Source: MondoVisione, 18.05.2009

Filed under: Exchanges, Japan, Risk Management, , , , , ,

Malaysia gives out more Islamic fund licenses

The country steps up efforts to become a global hub for Islamic investments by awarding licenses to Aberdeen, BNP Paribas and Nomura.

Malaysia’s Securities Commission has awarded three new foreign Islamic fund management licenses to Aberdeen Islamic Asset Management, BNP Paribas Islamic Asset Management and Nomura Islamic Asset Management. That brings to eight the total number of fund houses allowed to operate Islamic fund operations in the country.

The three fund houses already have a presence in the traditional asset management industry in Malaysia, as part of the five licenses issued under a special scheme announced in 2005 that allowed foreigners to gain access to the local market after eight years of strict capital controls.

The securities commission believes that the growing interest among foreign fund houses in the Islamic licenses up for grabs in Malaysia reflects their confidence that the country can be a global hub for Islamic fund and wealth management activities. Malaysia has an equities market that is more than 85% sharia-compliant, is the world’s largest issuer of Islamic bonds, and has more than 13 Islamic unit trust funds. Sharia principles generally preclude investment in businesses such as conventional financial services, alcohol, pork-related products, gambling, leisure and entertainment. Sharia principles also preclude interest-bearing investments and investments in companies with unacceptable levels of debt.

“Despite the global slowdown, the coming on board of these three international players reflects the strong growth potential in niche areas like Islamic fund management,” says securities commission chairman Dato’ Sri Zarinah Anwar. “This will help add depth and breadth to the Islamic finance industry, of which Malaysia commands a leadership role.”

The Malaysia government allows 100% foreign ownership of Islamic fund management companies, in line with its bid to attract more key fund players to the country. The incentive is part of ongoing liberalisation measures in Malaysia’s capital market as well as being aimed at complementing the broader Malaysian International Islamic Finance Centre (MIFC) initiatives of positioning the country as a hub.

Islamic fund management companies are allowed to invest all their assets overseas and will be given income tax exemption on fees received until 2016. They will also be able to tap into M$7 billion ($2.1 billion) in seed money from the Employees Provident Fund, the national pension fund for the private sector in Malaysia. Tax incentives are also being offered to existing stockbrokers that set up Islamic subsidiaries.

Fund management companies are hungry for a portion of the wealth of the Islamic community – especially those communities in the oil-rich Middle East – and Malaysia is creating the platform for them to be able to do just that. The opportunities are vast. The world’s Muslim population is estimated at around 1.5 billion, that’s around 22% of the world’s 6.7 billion population.

There are more than $202 billion in Islamic bank deposits worldwide growing by around 10% to 20% annually and around 300 Islamic financial institutions with assets of more than $560 billion, according to modest industry estimates. Boston-based financial services research firm Cerulli Associates notes that there are around $65 billion in sharia-compliant investments worldwide. Around 53% of those assets, or $35 billion, are held in mutual funds. Specifically, $33.6 billion is managed by local fund managers, while $1.4 billion is managed by foreign fund managers.

Islamic fund management is expected to sustain the growth of Malaysia’s asset management industry. Other countries in Asia are attempting to be an Islamic hub of sorts, either in banking or asset management. Malaysia is ahead of the pack in Asia and other markets in terms of manufacturing Islamic funds and this is among its main attraction for fund houses that want to set up shop there. The industry is still growing at a considerable pace and demand for unit trust products continues to be strong.

In granting the approval to the three fund houses, the securities commission considered, among other things, the scope of operations that will be established by each of the firms in Malaysia, their fund management experience, brand value, expertise in various markets, geographical presence, and compliance and risk management capabilities.

Atsushi Yoshikawa, president and CEO of Tokyo-based Nomura Asset Management says Islamic fund management is one of the fund house’s “most important strategies”.

Vincent Camerlynck, global head of business development and member of the executive committee at BNP Paribas Investment Partners in Paris, confirms that Malaysia will serve as a strategic hub for the fund house’s Islamic business and complements its Europe and Middle East centres.

The launch of BNP Paribas Islamic Asset Management Malaysia complements the fund house’s overall exposure to the Islamic fund industry through partnerships such as the SAIB BNP Paribas Asset Management in Saudi Arabia; products such as the BNP Paribas Islamic Equity Optimiser Funds, Easy ETF DJ Islamic Market Titans 100; advisory services such as the i-VCap’s listing of the MyETF Dow Jones Islamic market Malaysia Titans 25, Asia’s first Islamic ETF; and developments in setting up sukuk (Islamic bonds) and murabaha (Islamic financing) private placement funds.

BNP Paribas Islamic Asset Management Malaysia will be led by executive director Hisham Abdul Rahim, who has 12 years of experience in the financial services industry, including Islamic finance and asset management.

Gerald Ambrose, managing director of Aberdeen Asset Management in Malaysia, says the Islamic fund license is key to the firm’s expansion in the country. Aberdeen Asset Management was the first foreign fund house to set up operations in Kuala Lumpur to manage portfolios for institutional clients in 2005. That made Aberdeen, through its Aberdeen Asset Management Sendirian Berhad entity in Malaysia, the first foreign fund manager to have a presence in Malaysia in eight years.

Having an Islamic fund management license will allow Aberdeen to tap the retail market in Malaysia. Aberdeen manages an ‘Amanah’ or an Asia ex-Japan equity fund that is sharia-compliant, which has around $100 million in assets, for a client. The client has a set of advisors and sends Aberdeen a list of stocks that it can’t invest in. It is a unit trust with Middle Eastern subscribers, run by a bank there that has given Aberdeen the mandate to manage the fund from its Singapore office.

Islamic fund management licenses were previously granted to Kuwait Finance House (Malaysia), DBS Asset Management, CIMB-Principal Asset Management, Global Investment House and Reliance Asset Management.

See here for full article from Asian Investors

Source:AsianInvestor

Filed under: Banking, Islamic Finance, Malaysia, News, , , , , , , , , , , , , ,

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, , , , , , , , , , , , , ,

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