Kuala Lumpur, April 4 - Bank Islam Malaysia Bhd yesterday held a Signing of Mandate between the Bank and CMC Group Sdn Bhd for the CMC’s Restricted Investment Account (RIA) facility via Investment Account Platform (IAP).
Bank Islam, appointed as the Sponsoring Bank, is targeting to secure an investment of RM12 million to part-finance CMC’s RM23 million telecommunication integration project for the Ho Chi Minh City Urban Railway System (Line 1), Vietnam (Metro Line Project).
The campaign period for this RIA transaction is targeted to be held for four weeks from mid April 2017 and the target for the successful conclusion of the transaction is by mid May 2017.
Datuk Zamani Abdul Ghani, Chairman of Bank Islam; Datin Adilah Abdullah, Executive Director of CMC and Khairul Kamarudin, Bank Islam’s Deputy Chief Executive Officer graced the ceremony to witness the signing of mandate between Bank Islam, represented by Mohd Izhar Pawanchek, its Acting Head of Capital Market, and CMC, represented by its Chief Executive Officer, Hazwan Alif Dato’ Abdul Rahman. Also present at the ceremony are Mohamed Izam Mohamed Yusof, IAP Integrated Sdn Bhd’s Chief Executive Officer and Hizamuddin Jamalluddin, Bank Islam’s Chief Strategy Officer.
Zamani said, “IAP is a very beneficial platform for businesses to realise their projects and ventures. Bank Islam actively seek new companies with viable projects in order to optimise our intermediation roles in managing funds for the best interest of both investors and funded companies.”
“In line with the Bank’s belief in the importance of social progress and environmental impact, this involvement in Vietnam’s Metro Line Project serves as a mean to contribute to the progressive growth of a modern urban environment while solving the city’s traffic congestion and environmental pollution problems.”
This Metro Line Project is Bank Islam’s second RIA via IAP transaction since the launch of IAP in 2016. Vouched by previous track records, CMC has been entrusted by Hitachi Kokusai Electric Inc, the main telecommunication contractor of the project, to take on the telecommunication integration contract.
Potential investors of this RIA transaction may find this project a viable investment as it has been awarded a credit rating of a3 by RAM Solutions based on CMC’s established track record and healthy financial profile, the transaction’s financing structure that minimises cash flow leakage, and the main contractor, Hitachi Kokusai, being a reputable global company with strong credit profile.
The CMC RIA transaction is a relatively short investment with a tenure of 18 months should the potential investors invest in them. The expected return for the potential investors is 6.3% per annum with a minimum investment amount of RM5,000.
As the Sponsoring Bank for the transaction, Bank Islam will underwrite the unsubscribed portion of the RIA should it not be fully subscribed by investors under the IAP. RIA is a new asset class which provides better returns to investors as compared to normal deposits.
It provides a new avenue for investors especially high net worth individuals or angel investors to diversify their investment portfolio.
IAP provides a platform for investors to find Shariah-compliant investments and for companies that requires financing for their projects. IAP provides a new financing option for viable projects and aims to serve all spectrums of businesses including SMEs, corporates as well as entrepreneurs. It is a centralised multi-bank platform that is sponsored by six Islamic banking institutions that has established an entitiy to undertake business activities which are of common interest and in support of the country’s economic growth.