Frequently Asked Questions
Frequently Asked Questions
Below are Islamic Margin Financing products available and their features:
|2-in-1 Stock Trade-i (M2-i)||Normal Margin Financing-i (M3-i)|
|Definition||A short term Islamic margin financing for a period of 30 calendar days for each share purchase contract.||An Islamic margin financing for a period of three (3) months, with option to rollover.|
|Minimum financing amount||RM20,000||RM20,000|
|Margin call ratio||150%||150%|
|Force selling ratio||130%||140%|
|Minimum collateral coverage||165%||180%|
|Trading multiple (indicative only)||Cash = 2.5 times
Shares = 1.5 times
|Cash = 2.25 times
Shares = 1.25 times
|Profit rate (WEF 1st December 2022)||10.25% p.a.||10.00% p.a.|
|Profit free-period||Client may enjoy profit-free period up to T+10||Client may enjoy profit-free period up to T+2|
|Settlement period of the principal portion of each purchase contract||Within thirty (30) calendar days from purchase date||Within three (3) months from purchase date with option of rollover|
The products are structured using the Shariah principles of Murabahah via Tawarruq arrangement.
Mechanism of Commodity Murabahah:
- Following the Bank’s approval to grant Islamic margin financing to the client, the client will enter into Commodity Murabahah agreement that requires the bank to buy Shariah-compliant commodities from the commodity supplier/vendor at the Bank’s Purchase Price.
- The bank then sells the specified commodity to the Client at Bank’s Sale Price to be paid on deferred payment terms as agreed.
- The Client will appoint the Bank as agent to sell commodity to commodity buyer at a price equivalent to Bank’s Purchase Price.
You are required:
i. To maintain the required margin throughout the tenure of the facility in accordance to the percentage determined by the Bank.
|Required Maintenance Ratio||
165% - No utilisation of the facility or withdrawal of security shall be permitted where the market value of the security falls below 165% of the outstanding balance.
180% - No utilisation of the facility or withdrawal of security shall be permitted where the market value of the security falls below 180% of the outstanding balance.
|Required Equity Ratio||
M2-i & M3-i :
150% - Margin Call: Where the market value of the security falls below 150% of the outstanding balance, you shall within three (3) market days to pledge additional cash and/or shares acceptable to the Bank so as to bring the security coverage to not less than 150%.
ii. Accrued Profit must be paid within 7 calendar days from each calendar month ended, failing which shall result in force selling of your securities.
If you fail to fulfill your obligations, the Bank has the right to be compensated by way of the following mechanisms:
|Force Sell Ratio||
130% - Force selling: In the event that the market value of the security falls below 130% of the outstanding balance, the Bank shall have the absolute discretion to, and without notice to you, liquidate the available shares and/or such other security provided by you, so as to bring and maintain the security coverage at 150% of the outstanding balance and above.
|Late Payment Charge (“LPC”)||The Bank may charge you the LPC for failure to pay any amount that is overdue and which failure continues beyond the maturity date of the Facility.
The LPC charges as prescribed by the Shariah Advisory Council of the Bank Negara Malaysia, shall comprise a combination of ta’widh (compensation) and gharamah (penalty).