Bursa Malaysia has been validated with over 18,000 sign-ups for its physical gold-linked Shariah compliant product since its January launch this year, the Malaysian bourse’s Chairman Abdul Wahid Omar said at the Global Forum on Islamic Economics and Finance (GFIEF) 2024 in Kuala Lumpur.
A significant impact was the drastic reduction of spreads charged for gold investments, as only 1.3% is applied for the Bursa Gold Dinar offering. Abdul Wahid said other outfits used to charge spreads as high as 9% before the bourse’s competitive rates.
During a GFIEF panel session, Abdul Wahid said there had been some concerns about Bursa Malaysia venturing into physical precious metal offerings as there had been some recent failures among some private outfits — even though the latter kept costs low by issuing only certificates.
Given its rebranding as a multi-asset exchange, these concerns led to Bursa Malaysia opting for physical gold as asset backing and to be Shariah compliant. Abdul Wahid said fresh gold is procured by the bourse whenever purchases are made by investors.
With a RM10 (US$2.13) entry point and capped at RM3 million (US$638,840) per transaction, every 4.25g of gold investment can be redeemed in the form of a physical, custom-designed coin. Transactions are conducted via an app, with some applicable extra fees waived until the 30th September 2024.
Investments are restricted to Malaysian tax residents with a valid bank account in Malaysia and a Malaysian mobile phone number.
