News From : DagangHalal.com (23 Mar 2009)
KUALA LUMPUR: Bursa Malaysia is looking at launching its Commodity Murabahah House (CMH), a commodity-based transaction that utilises crude palm oil (CPO)-based contracts as its underlying asset, by mid-year.
Chief executive officer Datuk Yusli Mohamed Yusoff said the exchange was keen to offer an alternative Islamic trading infrastructure to the world’s Islamic financial institutions that had been utilising commodities traded on the London Metal Exchange as the underlying assets for Islamic finance and investment products.
“While commodity-based Mura-bahah transactions are vastly used in Europe and West Asia, the CPO-based CMH is the first such infrastructure in Malaysia,” he told reporters after the POC 2009 official opening by Plantation Industries and Commodities Minister Datuk Peter Chin Fah Kui yesterday.
Yusli also confirmed that Bursa Malaysia was still in talks with the Chicago Mercantile Exchange on possible CPO trade collaborating efforts.
Chin, meanwhile, said the relevance of CMH was not only for the palm oil industry but also for the growing Islamic capital market in Malaysia.
“I was told that CMH had received tremendous support from palm oil producers who have committed substantial value of CPO to be used as the underlying commodity with delivery settlement in ringgit.
“I strongly urge palm oil players to keep an open mind on CMH’s prospects as it spells more opportunity to expand their revenue stream should they offer their palm oil supplies to CMH,” he added.
Chin pointed out that the palm oil industry must strive to ensure stability in CPO prices.
The price forecasting by palm oil gurus in POC 2009, for example, can be considered a big indicator to gauge the next direction of palm oil. This is reflected by the large attendance of about 1,200 participants from 40 countries at the event.
Asked about the latest stimulus package, Chin said the Government had allocated RM75.8mil for development projects to be carried out by its agencies like the Malaysian Palm Oil Board, Malaysian Timber Industry Council, Malaysian Cocoa Board, Malaysian Pepper Board and National Kenaf and Tobacco Board.
For oil palm planters, he said: “We will continue to stabilise the price of fertilisers with suppliers from overseas to ensure long-term supply.”