KUALA LUMPUR (Dec 12): Bursa Malaysia Bhd is expecting a 5% to 10% growth in fund transactions within the next 12 months in its newly launched Islamic Securities Selling and Buying Negotiated Transaction (ISSBNT) framework.

It has today launched the ISSBNT framework, touted as the world's first Shariah-compliant Securities Borrowing and Lending Negotiated Transaction (SBLNT) alternative, to improve liquidity and portfolio optimisation, further complementing the ever growing value of Shariah-compliant securities in Malaysia.

Bursa Malaysia chief executive officer Datuk Seri Tajuddin Atan said currently 686, or 76%, of 902 companies listed on the exchange are Shariah compliant, making up RM1.84 trillion in market capitalisation, or 61.1% of the total market.

"Having seen the success in SBLNT and upon our research of understanding the market, there was a strong demand to have a Shariah-compliant version of it. That is why the ISSBNT framework was put [in] place," he told reporters after launch.

It was noted that the value of transactions in the conventional SBLNT framework, which was introduced in 2009, has grown from RM400 million in 2012 to RM4.7 billion in 2017.

"The framework (ISSBNT) is initially to cater to domestic demand, but we believe there is a growing interest globally, who would like to use this facilitation," Tajuddin added.

He said the SBLNT framework was chosen as the preferred model to develop ISSBNT because of its flexibility, allowing terms to be negotiated and agreed upon by parties of the transaction. It is also widely used by the market compared to other securities borrowing and lending models in the market, he noted.

In parallel, the ISSBNT framework is designed to deliver the equivalent outcome of a conventional securities borrowing and lending transaction, providing a facilitative trading environment and improved trading liquidity and velocity of securities, but is structured based on Shariah principles.