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Market Participants, Investors Urged To Participate On Labuan International Financial Exchange

Date 25/01/2002

It is very timely for market participants and investors to review the many benefits of a listing of Islamic and conventional financial instruments on the Labuan International Financial Exchange (LFX).

LFX Chairman Dato' Mohd Azlan Hashim said LFX has been developed with the ability to list and trade a comprehensive range of multi-currency instruments based on both Islamic and conventional principles.

"This enables LFX to provide virtually unlimited opportunities for sponsors, issuers and other beneficiaries to structure and determine innovative financial instruments that meet various funding requirements," he said.

Mohd Azlan was speaking at the listing ceremony of a USD150 Million Serial Islamic Lease Sukuk issued by First Global Sukuk Inc. (FGS). The proceeds from the listing will be used by the end beneficiary, Kumpulan Guthrie Berhad (Guthrie), to refinance part of its borrowings for its Indonesian operations. The listing sponsor is Bank Islam (Labuan) Ltd.

The word "Sukuk" means Islamic certificates or Notes and is similar to Trust Certificates issued by other conventional issuers. For this listing, each Sukuk represents solely an undivided ownership interest in the relevant assets on offer.

As the issuer, FGS will be responsible for any corporate disclosures of the Sukuk as prescribed by LFX's rules and regulations. As the listing sponsor, Bank Islam will be responsible for the listing of the Sukuk and ensuring that FGS adhere to their post-listing obligations.

LFX will facilitate the trading and clearing of the Sukuk instrument between its licensed trading agents. As a web-based exchange, LFX offers market participants and investors, fast and efficient access to its services, from anywhere in the world.

Mohd Azlan said the primary listing of the serial Islamic lease Sukuk is a significant beginning for LFX to continue to tap into the growing awareness and demand for Islamic financing.

This listing of Islamic Sukuk instrument on LFX today will indeed contribute towards the success of the Islamic financial market and serve as a precursor to the listing of other Islamic instruments on LFX.

"This indeed can serve as a primary example of how innovative institutions can facilitate business expansion on a cross border basis and how listing on LFX can help to raise capital and increase liquidity of the instrument," he said.

Mohd Azlan said LFX will facilitate the trading and clearing of the Sukuk instrument between its licensed trading agents.

"As a web-based exchange, LFX offers market participants and investors, fast and efficient access to its services, from anywhere in the world," he added.

Director-General of Labuan Offshore Financial Services Authority (LOFSA) Noorazman A.Aziz said the success of the primary listing of the Islamic lease Sukuk on LFX is testimony to enhanced understanding and willingness to participate in innovative capital financing.

"This underscores the on-going efforts by LOFSA in emphasising the development and growth of Labuan, not only as a premier International Offshore Financial Centre (IOFC) but as a leading centre for Islamic financing. With Islamic instruments listed on LFX, this will further attract funds and investors from the Middle East and other nations," he said.

Group Chief Executive of Guthrie, Tan Sri Dato' Abdul Khalid Ibrahim said the diversity and international reach of Guthrie's business operations require strategic capital raising approaches.

"In meeting the various capital generation requirements of the group, there must be continuous evaluation of the ways to meet present capital requirements as well as to fund growth and expansion.

"Guthrie will certainly continue to review the opportunities of offshore financing, not only to promote the Labuan IOFC and LFX, but to get the most value out of offshore capital generation," he said.

As an international offshore financial exchange, LFX facilitates the listing of multitude of multi-currency instruments including equities, investment funds, debt instruments, insurance related instruments and other categories of instruments as defined by the requirements of issuers and investors.

Further details on LFX are available at www.lfx.com.my.