KUALA LUMPUR (Aug 15): Permodalan Nasional Bhd (PNB) said it is in the midst of studying a potential issuance of Islamic shares (i-shares) by Malayan Banking Bhd (Maybank), which will be linked to the Islamic banking business of the group.
 
PNB group chairman Tan Sri Abdul Wahid Omar pointed out that currently about 25% of the Maybank group’s earnings come from the shariah-compliant businesses. He proposed 20% of the group’s shares can be designated as i-shares.
 
“It is not an option for Maybank or for that matter, any of the other banking groups like CIMB Group Holdings Bhd and RHB Bank Bhd to carve out and list their Islamic businesses separately.
 
“The question that we asked ourselves was that, what if we could come up with a ring fencing mechanism whereby the profits coming from the shariah-compliant activities are funnelled into and used to pay a portion of the dividends for the i-shares?” he said at a luncheon talk event with the media today.
 
If the plan goes through, he said this will create RM20 billion worth of new shariah-compliant instruments. He highlighted this is three times bigger than the market capitalisation of BIMB Holdings Bhd, one of the few shariah-compliant financial institutions listed on the local stock exchange.
 
This would also boost and promote the Islamic capital markets further, Wahid added.
 
Wahid said if the exercise is successful, it will pave way for other banks such as CIMB and RHB to follow suit, as well as for Bursa Malaysia Bhd itself.
 
“Since 60% of the companies listed on Bursa are already shariah-compliant, it means that portion of their profit is generated from shariah-compliant stocks.
 
“What if we can designate about half of Bursa’s shares as i-shares? Automatically, we will have RM1.7 billion worth of shariah-compliant shares listed,” he said.
 
He added this has been discussed informally with some of the members of the Shariah Advisory Council, whom he said were generally supportive of the idea.
 
However, Wahid said the council members have raised certain issues, adding it will take some time before the plan materialises.