OIC Members State Stock Exchanges Forum .


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OIC Individuals' State Stock Trades Gathering. Opportunities in the Islamic Capital Markets Section _________________________________________________ Raja Teh Maimunah Worldwide Head, Islamic Markets. Substance of Presentation. Shari'ah-consistent items and administrations
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OIC Members\' State Stock Exchanges Forum Opportunities in the Islamic Capital Markets Segment _________________________________________________ Raja Teh Maimunah Global Head, Islamic Markets

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Contents of Presentation Shari\'ah-agreeable items & administrations Islamic Finance & World Stock Exchanges Way forward for Greater Business Ties Improving OIC ICM Network on Islamic Products

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Shari\'ah-Compliant Products & Services Sukuk advertise Equity showcase Islamic Derivatives ?? ________________________ General view is that subsidiaries instrument for supporting objects is passable yet not stripped exchanging of subordinates. Supporting is essential for hazard administration and speculator insurance Asset-upheld securities Asset-based securities Equity-based securities Sukuk posting Shari\'ah-agreeable stocks Islamic unit trusts Islamic REITs Islamic ETFs Islamic Structured Product Stockbroking Dual Currency Structured Investment Equity-connected Structured Investment Shari\'ah-consistent exchanging Shari\'ah-consistent edge financing

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Sukuk Listing Why posting? More extensive wellspring of financing through perceivability USD 3.20 bil USD 16.2 bil USD 14.6 bil USD 21.9 bil Reduces cost of capital Opportunities for business wander through item recognizable proof inside and out liquidity through optional market exchanging Bursa Malaysia Sukuk postings @ August 2010 Better corporate administration Higher norms of administrative system

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Shari\'ah-agreeable Securities As of 31 May \'10… The Shari\'ah Advisory Council (SAC) of the Securities Commission of Malaysia gives screening offices to outside recorded values looking for an auxiliary posting on Bursa Malaysia. The world\'s first locale permitting organizations to ask for a pre-IPO screening by the SAC. Intermittent survey and observing by SAC on the Shari\'ah-agreeable status to encourage financial specialists\' basic leadership. 88% or 847 Shari\'ah-consistent organizations 64% or USD 206.93 billion of market capitalization 12% Notable Shari\'ah-agreeable Securities Listings : Shari\'ah-agreeable organizations Non Shari\'ah-consistent organizations

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Islamic Exchange Traded Funds (i-ETFs) ETFs Trading Value 2008 – 2009 in chose Asia Pacific Exchanges 2008 2009 No. of ETF recorded : 2008 Source: World Federation of Exchange Some liquidity issues… Depends on liquidity of fundamental stocks Rely on market producer for ceaseless valuing In-kind creation and recovery

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Islamic Real Estate Investment Trusts (i-REITs) According to study by the Trust Company and Baker & McKenzie , showcase development prospect in June 2010 has enhanced over all parts to 54% from 46% in 2009. Conceivable Advantages Potential for REITs in Asia Singapore holds the most potential nation in Asian REITs Listed 22 REITs Plans to rundown 2 Islamic REITs Tax Efficiency e.g. Malaysia, Bahrain Competitive Returns Highly fluid resources e.g. MENA area Low connection to market instability REITs in Malaysia Bursa recorded 14 REITs (3 i-REITs) Market Cap (Aug \'10): RM 9.6 billion. i-REITs covers 21.2% of aggregate Malaysian REITs. Proficient support against expansion Risk broadening

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New Product – Commodity Murabahah What is it? An offer of certain affirmed products, at a cost in addition to benefit premise. Utilizing Tawarruq idea It is an offer of an advantage for a buyer on conceded installment premise. The buyer then ahead pitches the resource for the outsider for money. Bank Negara Malaysia presented Commodity Murabahah Program (CMP)

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Bursa Suq Al-Sila\' Transactional chart Broker A 1 Commodity Supplier Islamic Bank A 2 Broker B Commodity Purchaser/Buyer Islamic Bank B Trading & Clearing Engine 3 Commodity Payment (spot) Payment (conceded) Example : Islamic Bank An is financing corporate customer B Islamic Bank B Islamic bank A purchases ware from item advertise on spot. Islamic bank A pitches ware to Islamic Bank B on conceded premise (obligation made). Islamic Bank B pitches the ware to Bursa Malaysia Islamic Services (BMIS), and after that BMIS offers it back to the market.

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Islamic Finance on the worldwide stage Islamic fund is getting to be standard and is being recognized by budgetary focuses all inclusive as an item class that can\'t be overlooked and stock trades worldwide are additionally progressively including Islamic venture items on their rundown of offerings London SE Channel Islands SE Vienna SE Irish SE Luxembourg SE Cayman Islands SE Bahrain SE Hong Kong SE Nasdaq Dubai Bursa Malaysia Saudi SE Singapore SE Indonesia SE

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London Stock Exchange (LSE) Retail Bonds PRODUCTS & SERVICES LSE presented retail security showcase in February 2010 called Order book for Retail Bonds (ORB). Sukuk Listings & Trading Shari\'ah-agreeable Stocks ORB Market Islamic Exchange-Traded Funds Listing Accessible to Gilts & little category securities Facilitating liquidity & value revelation to Private Investors Islamic Securities (Sukuk) Main Market PSM Market Listed 28 Sukuk (USD 17.7 bil) Regulated under MiFID Admission without full plan. This could expand retail-sized issuances Currently ORB market is material to traditional security yet offers chances to Sukuk wishing to get to the retail fragment. Source: London Stock Exchange NO ANNUAL FEE CHARGED

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London Stock Exchange (LSE) Islamic Exchange-Traded Funds Shari\'ah-consistent Stocks Listed 4 Shari\'ah-agreeable securities Listed under Alternative Investment Market (AIM) Updates on Islamic Finance in United Kingdom LSE contains 7 Islamic ETFs with AUM of over USD 128 million. Islamic managing an account resources : $19.4 billion * No. of undeniable Islamic banks : 5 No. of Islamic windows : 17 Gatehouse Bank in world-first cross-fringe exchange on Bursa Suq Al-Sila\' Source: International Financial Services London * Data starting at 2008

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Luxembourg Stock Exchange (Lux) PRODUCTS & SERVICES Sukuk Listings & Trading Shari\'ah-consistent Securities Shari\'ah-agreeable Stocks Developed/declared by Deutsche Bank. The stage meets gauges forced by AAOIFI. Takes into consideration issuance of tradable Islamic currency advertise items settling in T+0. This could empower liquidity in Islamic currency markets. Islamic Securities (Sukuk) The trade facilitated 16 Sukuk recorded worth EUR 5.1 billion (~USD5.5 billion). Sukuk Listing &Trading European Regulated Market Euro MTF Market exchanged on… Universal Trading Platform (UTP)

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Luxembourg Stock Exchange (Lux) Facts on Islamic fund in Luxembourg The principal European trade entering Sukuk advertise in 2002 with the posting of Malaysian Global Sukuk. Domiciled for the principal Takaful organization in Europe. Facilitated 51 Islamic assets at USD 500 million in resources. Stage for Shari\'ah-agreeable securities called Al-Mi\'yar in 2009. Source: Luxembourg Stock Exchange, Luxembourg for fund, PWC

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Hong Kong Exchanges & Clearing Limited (HKEx) Hong Kong\'s Islamic back business is still at its early stages arrange and the controllers i.e. HKMA and HKSFC are searching for joint effort. Controllers\' Active Role PRODUCTS & SERVICES Sukuk Listings HKMA and Central Bank of Malaysia marked MOU on participation in creating monetary administrations, basically in Islamic back region. Islamic Securities (Sukuk) Currently, there are 4 Sukuk recorded: 1Malaysia Sukuk Global Berhad Cherating Capital Limited MOU marked between HKSFC, SSC of Vietnam and SC of Malaysia to reinforce administrative participation in Islamic back. Paka Capital Limited Rafflesia Capital Limited

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Singapore Exchange (SGX) Islamic Equity Index PRODUCTS & SERVICES The primary Shari\'ah-agreeable dish Asian value file propelled (2006) Sukuk Listings Serves as benchmark to Islamic assets putting resources into Asian values. Islamic Equity Index Islamic Exchange-Traded Funds Islamic Exchange-Traded Funds Islamic Real Estate Investment Trust Daiwa Islamic ETF FTSE Shari\'ah Japan 100 Index (2009) Islamic Securities (Sukuk) As of August 2010… Islamic REITs gets ready for postings Source: IFIS Source: Reuters

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Bursa Malaysia Islamic Capital Market Experience _________________________________________________

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Malaysian ICM Regulatory Framework Trust Deed, Mandatory Rating, Underwriting, Utilization of Proceeds,… , and so forth. Securities 1 st TIER _____________ Applicable to both Conventional & Islamic Products Funds Investment Committee, Trustee, Deed of a Unit Trust Fund, Investment Restriction & Limits, and so on. REIT Constitution & Investment of REIT, Trustee, Valuation, charges and costs,… , and so forth. Sukuk Additional revelation on Musharakah and Mudharabah structure by means of Info Memo 2 nd TIER _____________ Only pertinent to Shari\'ah-consistent items Islamic Funds Role of Shari\'ah Adviser, Islamic Fund Management business through Islamic Window Islamic REIT Rental of Real Estate by Islamic REITs, occupant\'s exercises, properties possession and Takaful utilization

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Bursa Malaysia Bursa Malaysia\'s Islamic Capital Market Products cut over every customary item and works double money related framework. Center Businesses Shari\'ah-consistent Businesses Bond posting (Exempt Regime) Sukuk Listing (Exempt Regime) Equity Islamic Equity Derivatives Shari\'ah-agreeable securities Islamic REITs Islamic ETFs Islamic Structured Products Islamic Markets Stockbroking Islamic Stockbroking

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Bursa Malaysia i-REITs & i-ETFs Market Statistics

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Way forward for Greater Business Ties Global Trading Pattern Re-mutualization of trade Higher exchanging recurrence Ownership obtaining among exchanging firms and market creators Majority turnover in Europe, N. America MiFID Influence in Europe Dedicated door get to, co-area administrations and valuing assurance Multilateral Trading Facility (MTF Market) MTF is worked by speculation firm and market administrator Facilitates multipl

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