Bursa to expand choices for Bursa Suq Al-Sila'

Written by The Edge Financial Daily
Thursday, 15 October 2009 22:47

BAHRAIN: BURSA MALAYSIA BHD [] is looking to expand the choice of tradable commodities on the multi-commodity, multi-currency Bursa Suq Al-Sila' platform after gaining a foothold in the Gulf Cooperation Council (GCC) markets, said its chief executive officer Datuk Yusli Mohamed Yusoff.

"We aspire to serve the needs of more global players by adding depth and breadth to our Bursa Suq Al-Sila' platform," he said, adding that more choices would "benefit the global Islamic banking community in both the management of liquidity as well as product development".

The fully-electronic international commodity platform facilitates commodity-based Islamic financing and investment transactions under the syariah 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.

Yusli said since its launch two months ago, Bursa Suq Al-Sila' had 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," he said in a statement issued in conjunction with the Malaysia International Islamic Finance Centre (MIFC) roadshow to Bahrain.

An 80-member Malaysian delegation led by Raja Dr Nazrin Shah, Crown Prince of Perak and financial ambassador to MIFC is in Bahrain from Oct 13 to Oct 16, 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 yesterday in Bahrain.

In his keynote address, Raja Nazrin said Bursa Malaysia's end-to-end syariah-compliant commodity trading platform had gained footing in the GCC as more cross-border Islamic finance transactions were being witnessed, with recent trades being undertaken by CIMB Islamic and several GCC institutions.

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.

Through these trades, Bursa Malaysia hopes to meet the increasing demand for syariah-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.

"These international trades further stamp the viability of Bursa Suq Al-Sila' as the syariah 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," Yusli said.