KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak is confident the introduction of shariah-compliant securities will attract more investments from the Middle East.
"With the onslaught of a new wave of investments, more job opportunities will be created and this will indirectly make our economy stronger," he said in his latest Facebook posting.
Najib, who is also Finance Minister, said luring foreign investments into the country was Malaysia's top priority towards becoming a high-income status country.
"Based on this aspiration, the Securities Commission has introduced revised Shariah-compliant securities in order for Malaysia to draw more investments from the Middle-East," he said.
The Securities Commission announced yesterday an updated list of Shariah-compliant securities approved by its Shariah Advisory Council (SAC), based on the revised screening
methodology announced on June 18, 2012.
Under the revised screening methodology, SAC will adopts a two-tier quantitative approach which applies the business activity and financial ratio benchmarks.
The revision took into consideration the rapid development taking place in Malaysia's Islamic finance industry since the Shariah screening methodology was first introduced in 1995.
The revision will potentially spur greater inflow of foreign Islamic funds into Malaysian Shariah-compliant equities, thus expanding the Islamic capital market’s global reach, as outlined in the Capital Market Masterplan 2.
The updated list, which took effect yesterday, will feature a total of 653 Shariah-compliant securities which constitute 71 per cent of the 914 listed securities on Bursa Malaysia.
The list includes 16 newly classified Shariah-compliant securities and excludes 158 from the previous list issued in May.
To facilitate transition under the revised screening methodology, investors are given six months from Nov 29, being the effective date of the list of Shariah-Compliant Securities, to dispose off securities that are excluded from the list.
During the six-months period, dividends received and capital gains realised from the disposal of such securities may be retained by investors, without the need to channel any portion of the dividends and capital gains to Baitulmal and/or charitable bodies.
(News Straits Times / 30 Nov 2013)
---Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com
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