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Bursa SUQ AL-SILA’ Make Initial Foray Into GCC Market

In conjunction with the Malaysia International Islamic Finance Center (MIFC) roadshow to Bahrain, an 80-member Malaysian delegation led by the HRH Raja Dr. Nazrin Shah, Crown Prince of Perak and Financial Ambassador to MIFC, was in Bahrain from 13 to 16 October 2009. In conjunction with the roadshow and to facilitate discourse between market players in Bahrain and Malaysia, the Malaysia-Bahrain Business Forum entitled ‘Fostering Closer Collaboration’ was held on the 15 October 2009 at the Ritz Carlton, Bahrain.

In his royal keynote address, HRH Raja Dr. Nazrin Shah was pleased to announce that Bursa Suq Al Sila’, Bursa Malaysia’s end to end Shariah compliant commodity trading platform gained footing in the Gulf Cooperation Council (GCC) markets as more cross-border Islamic finance transactions were witnessed. The Bursa Suq Al-Sila’ platform received recognition in the GCC with recent trades being undertaken by CIMB Islamic and several GCC institutions.

Through these trades, Bursa Malaysia hopes to meet the increasing demand for Shari’ah-based commodity-financing and liquidity management in the GCC countries and globally, as well as serve the needs of global Islamic financial institutions which seek multi-currency platforms to aid their financing needs.

Chief Executive Officer of Bursa Malaysia Berhad, Dato’ Yusli Mohamed Yusoff said, “These international trades further stamp the viability of Bursa Suq Al-Sila’ as the Shari’ah platform of choice to facilitate cross-border Islamic finance trades as well as having the capability as a world-class infrastructure which supports a transparent and regulated market. In addition, these transactions that are conducted with GCC markets further enhance Bursa Malaysia’s strategic relations with global financial institutions as well as affirm the expertise of Malaysian banks as commodity trading participants in striking financial partnerships with international players.”

Dato’ Yusli added that since its launch two months ago, Bursa Suq Al-Sila’ has seen significant progress in terms of reach and operations. “The recent cross-border transactions, which are done in foreign currencies, demonstrate its international compatibility, particularly with the more established Islamic financial institutions globally.”

“We aspire to serve the needs of more global players by adding depth and breadth to our Bursa Suq Al-Sila’ platform. We are currently looking to expand the choice of the tradable commodities on this multi-commodity, multi-currency platform so as to benefit the global Islamic banking community in both the management of liquidity as well as product development,” concluded Dato’ Yusli.

In a move to promote the development of global Islamic finance, the trades also demonstrated strong efforts to foster greater cross-border linkages and business relations between the Eastern Islamic financial markets in Malaysia and those in GCC countries. These trades by the GCC institutions came close on the heels of the first international transaction on Bursa Suq Al-Sila’, which was conducted by a British Islamic bank, Gatehouse Bank plc.

The fully-electronic platform, launched in August 2009, 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 platform is the first initiative of its kind in the world encompassing a hybrid market providing participants a choice between participating in the exchange through the traditional voice broking system or the faster automated electronic exchange system which is web-based.

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