6 days ago
- Business
- New Straits Times
CGS eyes regional growth in Islamic finance, eyes MENA expansion
KUALA LUMPUR: CGS International Securities Malaysia Sdn Bhd (CGS MY) is broadening its Islamic finance presence across the region, targeting markets such as Singapore, Indonesia, and eventually the Middle East and North Africa (MENA), with Dubai in its sights.
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.
