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OSK Investment gears for growth with more Islamic finance products

by Ronnie Teo, ronnieteo@theborneopost.com. Posted on April 16, 2012, Monday

Yazit Yusuff

KUCHING: As one of the key Islamic players in the industry, the Islamic Banking division of OSK Investment Bank Bhd (OSK Investment) strives to coordinate its products to achieve the many needs of its clients while complying with the strict Islamic financial requirements.

According to Yazit Yusuff, director and head of Islamic Banking division of OSK Investment, the group offers a wide spectrum of innovative syariah-compliant products and value-added advisory services to government departments and agencies, Islamic financial institutions, corporations, private companies and high net-worth individuals.

“In line with the bank’s regional aspiration, we launched the International Currency Business Unit (ICBU) under the initiative of Malaysia as International Islamic Financial Centre (MIFC) to handle all the bank’s foreign currency activities,” Yazit gave as an example.

“Also, we are in the final stages of introducing new business initiatives in Islamic stock-broking,” he added.

“This new offering will offer end-to-end syariah-compliant stock broking to institutional as well as retail clients.”

Yazit noted that the services entail research on syariah-compliant stocks, buying and selling of shares, settlement, discretionary and margin financing.

“We hope that this model, when successfully launched in Malaysia, will be introduced in other markets with predominantly Muslim presence where we have presence,” he revealed.

These initiatives were made alongside several objectives OSK Investment hoped to gain from the Financial Sector Blueprint 2011-2020, Yazit added, which include the strengthening regional and international financial integration.

“We hope to further strengthen our existing presence in the regional market in line with the said recommendation. This time around, it would be even better as it has become a national agenda and the regulators shall provide the necessary platform to facilitate this agenda.

“We also hope for the internationalisation of Islamic finance. This recommendation is timely as we are also currently looking at opportunity to tap the potential market for Islamic finance in particular the area of fund and wealth management,” he added.

“On this score, we have better advantage since we already have presence in countries like Indonesia, Hong Kong, Singapore and recently in Thailand which represent emerging Islamic financial market in the region.”

STRENGHTENING OPERATIONS: Looking at the division’s future growth plans, OSK Investment’s Islamic banking division hopes to strengthen its ringgit-based operations by increasing client base, promoting more financing products as well as introducing retail deposits products.

Yazit enthused that with their knowledge on these markets, OSK Investment would be able to successfully roll-out Islamic financial instruments that meet the demands of the respective countries in which it had presence.

“Another interesting market is Cambodia where we already have a fully owned commercial bank and securities company,” he noted.

Meanwhile, another key segment possible for development was in deep and dynamic financial markets.

“The blueprint highlights that the foreign exchange market shall be further developed by adding more breadth and liquidity to facilitate a more efficient and cheaper means of conducting international trade as well as greater diversity of foreign exchange products,” Yazit said.

“We can potentially gain from this initiative in the long run given our strong regional franchise and ability to tap on greater cross-border transactions that require foreign exchange hedging mechanism.”

In addition, the group could also gain from the more competitive money market in term of greater availability of liquidity, promotion of more government securities and specifically for Islamic Banking operation, promotion of deeper and broader sukuk market, he added.

Looking at the division’s future growth plans, OSK Investment’s Islamic banking division hoped to strengthen its ringgit-based operations by increasing client base, promoting more financing products as well as introducing retail deposits products.

“Apart from building up our ICBU business and establishing an end-to-end Islamic stock broking business, we also hope to expand our syariah advisory services to clients from both within OSK’s group of companies as well as external parties.

“We wish to also develop more capital market instruments such as equity derivatives products in addition to providing continuous support to other business segments within OSK Investment, such as Debt Capital Market and Corporate Finance in securing syariah-compliant mandates,” he concluded.

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