Malaysian bank launches Islamic stock broking

KUALA LUMPUR: Malaysian lender AmInvestment Bank launched its Islamic stockbroking business on Thursday, offering investors a channel to invest in stocks that comply with religious law requirements.

Investors can also trade sharia-compliant stocks through conventional brokers but their funds would be placed together with conventional funds where surplus amounts are placed in interest-bearing accounts. Islamic stockbrokers, in contrast, separate investors’ funds in special accounts which are then invested only in assets that meet the sharia’s standards.

Stocks have to avoid activities such as interest-based lending, conventional insurance, gaming and tobacco to be classified as sharia-compliant. Just over half of Malaysia’s population of 27 million are Muslims. The country aspires to become a global hub for Islamic finance, and already has the world’s largest sharia-compliant debt market.

About 85 percent of securities, or 843 stocks, listed on Bursa Malaysia are sharia-compliant. They include top mobile phone company TM International, food manufacturer Nestle (Malaysia) Bhd, energy firm Esso Malaysia Bhd and builder Gamuda Bhd. AmInvestment, part of AMMB Holdings, Malaysia’s sixth largest lender in terms of market capitalisation, said the domestic market would be the initial focus of its Islamic stockbroking business.

continue reading at…http://www.dailytimes.com.pk/default.asp?page=2008%5C08%5C23%5Cstory_23-8-2008_pg5_8

 

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