A COMPARATIVE BETWEEN RETAIL SUKUK WITH

OTHERS RETAIL INVESTMENT IN MALAYSIA

NUR ELVEANA BINTI BASIR (ZP02390)

Graduate School of Business (GSB –UKM)
Universiti Kebangsaan Malaysia
areveana91@gmail.com
 CONTENTS
• TEACHING CASE
– CASE OVERVIEW
– Intro,concept of sukuk, DanaInfra
• TEACHING NOTES
– Case positioning
– Case leading
– Suggested question for discussion
 Introduction
• On one day in July 16, 2014, Mr. Mohd Firdauz, small business
entrepreneurs crackers amplang in Sabah. While discussing with his
family on discussing how to enlarge his business and gain profit, He
received a call from a friend who lived on the peninsula. In
conversation, he found out that now have investment for retailers,
namely "Retail Sukuk DanaInfra". Also state that now still has the
opportunity to make investments for the period of the Third DanaInfra
Offer Retail Sukuk, has been opened on the first day of July 21, 2014.
Furthermore Sukuk infra fund was launched recently is the first sukuk
that can be subscribed civilians in Malaysia. Mr Mohd Firdauz thinks
the news is just in time as he was looking for opportunities to make
investments. However, without having any experience in investments, he
still in thought, does this investment is affordable to retailers and what
are the advantages compared to others retail investment or shares?
 Cont.

• Hence, he quickly returned home, surfing the

internet to get information to find out more about
the key features DanaInfra Retail Sukuk,
understand the rights and responsibilities of the
holders of Sukuk Retail DanaInfra and the parties
involved, with basic information about the main
risk factors that related to investments in Sukuk
Retail DanaInfra, and other relevant information.
 UNDERSTANDING OF SUKUK
• Sukuk is derived from the Arabic language which sak
(singular) and sukuk (plural) that has a meaning
similar to a certificate or note. in the practical
understanding, sukuk is proof (claim) ownership.
• Definition sukuk / certificates are certificates of equal
value with part or wholly of ownership of tangible
property and services to get results in the ownership
of assets and certain projects or special investment
activity, the certificate is valid after receiving niali
sukuk, at maturity by accepting the funds are fully
consistent with the objectives The sukuk.
 DANAINFRA NASIONAL BERHAD
• DanaInfra Nasional Berhad is a special purpose company established
in March 3, 2011 with the main aim to finance infrastructure projects
identified by the government of Malaysia. Klang Valley MRT project
is the first infrastructure project funded by DanaInfra.
• The first organization to issue Sukuk Retail of the Exchange Traded
Bonds and Sukuk (ETBS) :
– listed and traded on Bursa Malaysia on February 8, 2013. This product is known as
Sukuk Retail DanaInfra.
• The establishment of DanaInfra Nasional Berhad (“DanaInfra”) was
pursuant to the Economic Council’s decision on 14 June 2010 after an
in-depth consideration for the need to have an Infrastructure Financing
Entity (“IFE”) to advise and undertake funding for the proposed My
Rapid Transit project (“MRT Project”).
Cont.
As a funding vehicle for certain
infrastructure projects, DanaInfra has a
role and mandate to:

 Advise on best methods of

fundraising exercise and most
effective payment structures;

 Develop best structures for long-

term funding at efficient cost;

 Execute and implement

fundraising and payment
strategies; and Identify strategic
investors

Figure 1: The DanaInfra corporate

Framework
 DANAINFRA RETAIL SUKUK
Description
Issuer Danainfra Nasional Berhad (DINB)
Guarantor GoM
Offer size Up to RM100 million in nominal value
Use of proceeds To finance the capital expenditure and operating expenses in
relation to the development of the MRT Project

Face value RM100 per unit of DanaInfra Retail Sukuk

Maturity date
Profits payment frequency
First coupon/profit data payment
Coupon / profits rate
Listing
Seventh (7th) anniversary of the Issue Date
Semi-annual
6 months from the issue date
4.23% per annum
Bursa Malaysia under the ‘Loans and Bonds’ Board

Minimum amount Minimum subscription of 10 units or Rm1000, and for

Maximum amount maximum amount is no limit

How to buy Via application forms or Internet Banking or Automated Teller

Machine (“ATM”) of the Participating Financial Institutions
( AmInvestment Bank Berhad, CIMB Investment Bank Berhad,
Maybank Investment Bank Berhad or RHB Investment Bank
Bhd)

Rating The Icp/IMTN programmes and the sukuk issued under the
ICP/IMTN programmes will not be rated.
 Cont.
The Benefits of DanaInfra Retail Sukuk
– Provides investors an opportunity to diversify their
investment portfolio
– Profit Payment is guaranteed by the GoM
– Payment of principal / Face Value at maturity is
guaranteed by the GoM
– Fixed semi-annual Profit Payment Amount
– DanaInfra Retail Sukuk will be quoted and
tradable on Bursa Malaysia
– DanaInfra Retail Sukuk is an approved Shariah-
compliant investment
 The Murabahah transaction
Step 1 :

• From time to time, DINB and the Facility

Agent (acting on behalf of the
Sukukholders) will execute an asset
purchase agreement (“Purchase
Agreement”) under which the Facility
Agent shall purchase certain Shariah
compliant assets (“Assets”) from DINB
for an asset purchase price (“Purchase
Price”).

• The Purchase Price will be the amount to

be disbursed under the Sukuk and will be
in compliance with the asset pricing
requirements under the Securities
Commission Malaysia (“SC”)’s
Guidelines on Sukuk (revised and
effective on 8 January 2014) as may be
amended from time to time (“Guidelines
on Sukuk”).
 Cont.
Step 2  The Issuer shall then issue Sukuk to evidence the Sukukholders’ ownership of the Assets and thereafter,
upon the onward sale of the Assets to DINB, the Sale Price and the rights of the Sukukholders via the
Facility Agent under the Sale Agreement.
 The proceeds received from the Sukukholders shall be used by the Facility Agent to pay the Purchase Price.

Step 3 Pursuant to a Murabahah arrangement (“Murabahah Arrangement”), the Facility Agent (acting on behalf of the
Sukukholders) will then sell the Assets to DINB via a sale agreement (“Sale Agreement”) for an asset sale price
(“Sale Price”), which shall be paid by DINB on a deferred basis and shall be evidenced by the Sukuk.

Step 4  The Sale Price will represent the Purchase Price plus the applicable profit margin i.e. the aggregate periodic
profit payments based on a fixed profit rate to be agreed at the time of issuance (if applicable) plus the
Discounted Amount calculated at the issue date of each relevant Sukuk issuance (if applicable).
 DINB (as part of its obligation to pay the Sale Price) shall make periodic profit payments in the case of
IMTNs with profit payments or one-off payment to the Sukukholders in the case of Sukuk without periodic
profit payments (“One-off Payment”).
 At (i) the maturity date of the Sukuk; or (ii) upon the declaration of an Event of Default whichever is earlier,
DINB (as part of its obligation to pay the Sale Price) will pay the Sukukholders all amounts then outstanding
on the Sale Price as final settlement of the same subject to the Redemption Rebate (if applicable), upon
which the Sukuk will be cancelled.
 CONCLUSION
• En. Mohd Firdauz have to make a decision whether he
should invest to the new retail sukuk DanaInfra that an
ETBS issued by DanaInfra and guaranteed by the GoM.
Recently, after seeing detail of issuance retailers
DanaInfra investment structure in the risks and benefits,
he feels that, it is still needs to be consider as the limited
information of Insvestment facility.
• The main issue in this matter is not many companies that
issue bonds. Institutional investors also complain about
this, so perhaps difficult retail investors can participate
directly in this market in the near future. Most likely if
DanaInfra Nasional Berhad, will open infrastructure
projects in Sabah and Sarawak to retail investors who are
looking at investing funds to be used.
 SUGGESTION QUESTION
1. How do the calculations if Mr. Mohd Firdauz wants hold until
maturity or sell at a discount?
2. What differential between ETBS and others retail investment
such as unit trust?
3. How is an ETBS different from traditional bonds/sukuk transacted
by institutional?
4. Should Mr. Mohd Firdauz invest in DanaInfra retail sukuk?
Please justify
5. Why did DanaInfra choose the Murabahah structure for its first
issuance?
6. What obstacles of retail sukuk in Malaysia?
 LEARNING/TEACHING OBJECTIVES
Learning objective Suggested question
 Self-motivated learning skills What the skills and knowledge that
The case studies can help for student can gain by the time of case
encouraging in analyse the cas to discussion after it completed?
proactive thinking and carry out  To identify an issue and opportunities in
independent research out of lecture sukuk.
environment.  To stimulate understanding on concept
 Problem solve sukuk retail and its structure.
Case analyse also help in learning how  To comparison between sukuk retail with
to solve the problems like real-life traditional sukuk/bond and others retail
problems with workplace skills and investment.
performance ability. Able to find the
right or use appropriate resources for
problem solving.
 Team working skills
To motivate the skills on efficient
collaboration as a member of a group,
communication and leadership skills
and ethical skills.
 TARGET COURSE/SUBJECTS
The target concentration for this case is to be
completed specifically for persons demand for
Islamic financial,undergraduated, master degree,phd
student in the field of Islamic economic,capital
markets,strategic management and other related
courses/subject
 TYPE OF CASE
Type of case Explanation
 Compare/contrast  To compare and evaluate the
 Decision-focused case key differentiate between
 Demonstrate case sukuk retail with others retail
 Mini case for retail sukuk investment.
 Making decision by
encountering problem related
to issues arises in the case
 Demonstrate on sukuk concept
and its structure
 CASE LEADING
• Semi-directive: small group present the class followed by a
discussion session headed by the case leader.
•
• Main issue or problem to be addresses
– To stimulate understanding on concept sukuk retail and
its structure.
– To comparison between sukuk retail with traditional
sukuk/bond and others retail investment.
•
• Position of the protagonist
• Mr. Mohd Firdauz, a small business entrepreneur’s crackers
amplang in Sabah.
 Time
Instruction week

Lecture on sukuk (explain the concept of sukuk &etc) 1st

Distribution of case to groups (4-5 groups) 2nd
Case presentation and discussion. (each group will 4th
be given in 30 minute to discuss the case including
answers subject to time constraint)
 THANK YOU 

 All the information based on the DanaInfra website ,others news and etc.