CGS International, which currently operates in 15 countries, is looking to expand its operations into the MENA region and is also mulling offering Shariah compliant offerings in China, CGS Malaysia’s Shariah Services Group Head Rushdan Nadzir told IFN Investor.
Given the extensive reach of its parent company, China Galaxy Securities, ethical and green offerings could be an attractive option for investors seeking to diversify portfolios – as long as religious aspects are not featured, noted Rushdan.
This is to ensure regulatory compliance in some jurisdictions that CGS operates in, having grown to serve over 18 million clients globally. Despite its mainly Asia-centric operations being largely conventional, the rapid Shariah business growth for CGS in Malaysia has led the firm to consider MENA expansion.
Shariah offerings at CGS Malaysia saw its Islamic share margin financing grow from zero to about RM100 million (US$23.72 million) in just two years. CGS Malaysia also initiated Shariah product launches, with the latest two specifically targeted to sophisticated investors.
“Malaysia remains our core market with around 10 (Shariah) products; we are slowly introducing these offerings in Singapore and Indonesia as well.” Rushdan said that CGS International is also “in the planning stage to open an office in Dubai.”
The latest Shariah products launched in Malaysia – the Islamic Equity Linked Investment Notes and Islamic Autocallable Equity Structured Investment Notes – have minimum subscriptions of RM100,000 (US$23,720) and targeted at investors seeking short-term returns within a year.
Structured in one or two-month offerings, the notes will invest in any single stock that a client chooses from Shariah compliant equities listed on Bursa Malaysia. Being a client-driven investment, this offering is activated immediately. The autocallable notes have longer tenors of six to 12 months.
These instruments are positioned to offer higher returns than Islamic fixed deposits, with returns ranging from 8% to 15% annually – set out in advance, based on the historical track record of the invested stocks.
