CGS eyes regional growth in Islamic finance, eyes MENA expansion
According to head of Shariah services Rushdan Nadzir, navigating regulatory hurdles remains a challenge due to differing interpretations of Islamic finance, particularly in jurisdictions like Saudi Arabia and Indonesia, where structures like Tawarruq face tighter scrutiny.
Nonetheless, CGS MY is pushing ahead with its expansion plans, with a strong focus on accelerating its Islamic finance growth in Indonesia.
"We see from the movements during the pandemic and post-pandemic as well, and I guess the overall awareness around these Shariah products is needed. We want to provide access to ethical, high-yield investments that are scalable and rooted in compliance. Whether you are investing RM10 or RM100,000, there should be no trade-off between faith, function, and return," said Rushdan.
CGS MY recently launched its first Islamic structured investment products—the Islamic equity-linked investment notes (Elin-i) and Islamic autocallable equity structured investment notes (Aesin-i)—designed for high-net-worth and institutional investors.
Rushdan said the launch marked a strategic milestone in positioning Malaysia as a regional hub for Islamic financial innovation.
"These structured products are a high-risk, high-return investment, with indicative returns ranging from potentially 8 to 15 per cent per annum.
"As outlined in Bank Negara Malaysia's Financial Sector Blueprint 2022 to 2026, the launch supports CGS's position as a leading Islamic finance hub in Asean," he said, adding that these high-risk, high-return products offer potential annual returns of 8–15 per cent.
Rushdan said that Malaysia's Islamic capital market is now valued at over RM2.6 trillion, accounting for 63 per cent of the total capital market, while the country also holds 36 per cent of the global sukuk market share as of end-2024.
The firm noted that Shariah-compliant stocks have historically outperformed, particularly in Malaysia.
"Although Shariah-compliant assets currently account for roughly 20 per cent of CGS MY's business, the segment is expanding rapidly.
"CGS's Islamic share margin financing grew from zero to over RM100 million in just two years, and demand is also growing in futures, equity trading, and Islamic wealth management," he said.
According to him, institutional clients, particularly fund managers with Islamic mandates, are increasingly conducting trades through Shariah-compliant brokers.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
13 hours ago
- New Straits Times
Banks' RM4.36bil buffer to cushion US tariff impairment risks
KUALA LUMPUR: Malaysian banks are expected to remain resilient even if credit risks rise due to new United States tariffs, thanks to a sizeable RM4.36 billion management overlay (MO) buffer that could cushion potential loan impairments, according to CGS International. The firm estimated that if banks need to provide for 50 per cent of the new gross impaired loans (GIL), the management overlay will be able to cover up to 37.9 per cent of the increase in banks' total GIL in financial year 2026. CGS said Public Bank holds the highest management overlay coverage at 91.8 per cent, while Bank Islam trails with only 10.6 per cent. It added the higher tariffs imposed by the US on Malaysian exports could reduce the business volumes and revenue of Malaysian companies that are reliant on the US market. This, in turn, may weaken their debt servicing capabilities, sparking concerns of increased credit risks for Malaysian banks. "As a consequence, we project GIL of the banks under our coverage to rise by 5.6 per cent in FY25 and 7.0 per cent in FY26," it added. Based on a stress test conducted to assess the impact of rising GIL on banks, CGS estimated that a 10 per cent increase in FY26 gross impaired loans would reduce the combined FY26 net profits of banks under its coverage by 3.2 per cent. "In our test, the least impacted banks were Hong Leong Bank (-1.0 per cent) and Public Bank (-1.3 per cent) while the most impacted was Affin Bank (-10.9 per cent). "If the sector's GIL rises 30 per cent, the negative impact on banks' total FY26 net profits is 9.6 per cent, ranging from 3-4 per cent for Public Bank and Hong Leong Bank to 32.8 per cent for Affin, based on our estimates," the firm added. CGS maintained its "Overweight" stance on banks, premised on potential re-rating catalysts of ongoing write-backs in management overlay and expected increases in the dividend payout ratios for most banks.
The Sun
a day ago
- The Sun
MAIPs drought recovery project in Kenya wins IFRC recognition
KANGAR: The International Federation of Red Cross (IFRC) has officially commended the Perlis Islamic Religious and Malay Customs Council (MAIPs) for its 'MAIPs Ndengu Revolution' project in Kitui, Kenya. The initiative, focused on post-drought recovery, was lauded for its long-term impact on vulnerable communities. IFRC Regional Director for Africa, Charles Mbeeta Businge, presented the recognition during a roundtable discussion with the Raja Muda of Perlis, Tuanku Syed Faizuddin Putra Jamalullail, in Nairobi last week. The event coincided with MAIPs' 'Safar Ilmi 2025' programme. 'Through the Ndengu Revolution project, MAIPs has developed a medium- and long-term recovery approach for communities affected by drought in Kenya,' stated MAIPs. The project supplies ndengu (green gram) seeds, agricultural resources, and livelihood training, ensuring recipients achieve self-reliance beyond immediate relief. The initiative has been featured in global reports, including IFRC publications highlighting zakat's role in international humanitarian efforts. Charles Businge noted that MAIPs demonstrated how zakat can drive disaster recovery and poverty alleviation. 'The project is an exemplary model of Islamic philanthropy integrated into the global humanitarian agenda,' he said. Launched in 2018, the project underscores Malaysia's growing influence in cross-border Islamic aid, merging faith-based giving with sustainable development. - Bernama
Barnama
a day ago
- Barnama
IFRC Lauds MAIPs For Transformative Community Initiative In Kenya
KANGAR, July 26 (Bernama) -- The 'MAIPs Ndengu Revolution' project, a community recovery initiative by the Perlis Islamic Religious and Malay Customs Council (MAIPs) in Kitui, Kenya, has received official recognition from the International Federation of Red Cross (IFRC). In a statement today, MAIPs said the recognition was for its transformative contribution to the lives of vulnerable communities in the aftermath of drought. The statement said the recognition was conveyed by IFRC Regional Director for Africa, Charles Mbeeta Businge, during a roundtable discussion with the Raja Muda of Perlis, Tuanku Syed Faizuddin Putra Jamalullail, held in Nairobi last Thursday in conjunction with the 'Safar Ilmi MAIPs 2025' programme. "Through the Ndengu Revolution project, MAIPs has developed a medium- and long-term recovery approach for communities affected by drought in Kenya. "This includes providing ndengu pulse crop seeds, agricultural inputs, livelihood support, and community capacity building. The project does not only address short-term needs, but also builds resilience and self-reliance among the recipients," the statement read. The initiative by MAIPs has also been documented in several international reports and journals, including 'The Transformative Power of International Zakat: How zakat support from Malaysia helped communities in Kenya recover from drought' and 'Your duty for their dignity: the transformative power of international zakat financing', published by IFRC and cited in global Islamic philanthropy discourse. Meanwhile, in the same statement, Charles Businge said Malaysia, through MAIPs, had proven that zakat instruments could expand internationally and serve as a catalyst for recovery and community resilience in the context of disasters and prolonged poverty. He described the project, which began in 2018, as an exemplary model of how Islamic philanthropy can be integrated into the global humanitarian agenda with professionalism and integrity. -- BERNAMA
