Malaysia: Syariah-compliant small cap index launched

KUALA LUMPUR: FTSE Group and Bursa Malaysia have launched the FTSE Bursa Malaysia Small Cap Shariah Index to complement the existing FTSE Bursa Malaysia syariah indices.

In a joint statement, it said the new syariah index was designed to provide investors with a precise benchmark for syariah-compliant investment in Malaysian small cap companies.

The FTSE Bursa Malaysia Small Cap Shariah Index was developed in response to the needs of market practitioners who noted the lack of a benchmark to track the performance of syariah-compliant small cap companies. Constituents are selected from the universe of the FTSE Bursa Malaysia Small Cap Index according to the Malaysian Securities Commission's Shariah Advisory Council screening methodology.

The index is based on FTSE's award winning methodology which includes free float adjustment and liquidity screens and is managed in accordance with a clear and transparent set of index rules governed by an independent index committee.

The new FTSE Bursa Malaysia Small Cap Shariah Index forms part of the FTSE Bursa Malaysia Emas syariah universe and will be calculated on an end-of-day basis. Subscribers to the FTSE Bursa Malaysia Index Series will receive the new index as part of their existing data package at no extra cost.

(The Star Online / 17 Oct 2012)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

Malaysia: Shariah focus for new fund

Bullish on the country’s economic resilience, CIMB Principal Asset Management Bhd (CIMB-Principal) has launched the CIMB Islamic Al-Azzam Equity Fund, a syariah-compliant equity fund which aims to achieve consistent capital growth over the medium to longterm period.

The open-ended fund will invest 70-98% of its net asset value in syariah-compliant Malaysian equities listed on Bursa Malaysia, made suitable for those seeking to have a portfolio of investments that adhere to syariah principles.

Deputy chief executive Munirah Khairuddin yesterday said: “We believe if we continue to invest in stocks with strong fundamentals that includes healthy cash flow, quality company balance sheets and strong dividend yields, the fund should be able to deliver consistent long-term capital gain.”

The fund investment focus will be on companies mainly in oil and gas, plantations and consumer discretionary sectors, she added.

With a minimum investment of RM500, even individual retail investors can have access to established companies such as Axiata, Tenaga Nasional Berhad, IOI Group and Digi, among others, said Munirah.

She said the fund managers believed these companies would exhibit above-average growth potentials relative to the industry peers despite a global slowdown.

Syariah-compliant unit trust funds continue to gain popularity even among non-Muslims, because the equity component of such funds can be less volatile and more defensive in nature, she added, as these elements help boost investors confidence when investing in the country.

“In recent months, markets have been receiving more funding for the Economic Transformation Programme and national budget programmes focused on economic growth,” she said, the country has attracted a fair bit of foreign funds, which seek a safe haven amidst current volatile Asian markets that has lifted Malaysia’s Price Earning Ratio premium contribution to the region to a high of 38%.

Additionally, the premium is also partly justified by the 11% higher Malaysian earnings per share growth contribution to the region.

The fund, with an approved fund size of 600 million units, is priced at 25 sen per unit during the initial offer period. It is distributed by CIMB Bank, CIMB Private Banking, CIMB Investment Bank Bhd – Retail Equities and CIMB Islamic Bank, with the initial offer period ending on Aug 21.

(The Malay Mail / 02 August 2012)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com