Bursa Malaysia Readies Islamic Short-Selling System

Mar 31 2009 | 2:03am ET

Eyeing the growing Shariah-compliant hedge fund market, Malaysia’s stock exchange is readying a platform to facilitate short-selling, which is generally barred by Islamic law.

Bursa Malaysia’s regulated platform would likely involve short-sellers actually buying, rather than borrowing, the shares they are betting against. Islamic law forbids selling things that one doesn’t actually own; the stock market’s plan would have hedge funds and other investors buy the stock for a fraction of its value while simultaneously agreeing to sell it back to the seller at a later date, Reuters reports.

“This will help in bringing in Islamic hedge fund activities,” Bursa Malaysia CEO Yusli Mohamed Yusoff told Reuters. “Short-selling is an essential ingredient for capital markets to perform efficiently.”

Yusoff added that the precise structure of the short-selling system is still “being worked on.”


In Depth

GSAM's Papagiannis: Liquid Alternatives For The Long Run

Apr 21 2017 | 8:44pm ET

Interest in liquid alternatives cooled a bit last year amid a broad shift in investor...

Lifestyle

Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is returning to the public debt markets for the...

Guest Contributor

Debunking Conventional Investment Wisdom (Part II)

Apr 17 2017 | 5:56pm ET

The alternative investment industry is currently replete with buzzwords around data...

 

From the current issue of