PWB :FAQ

FAQ Q&A

Frequently Asked Questions

Frequently Asked Questions

  • Account Opening
  • eIPO
  • Global Trading
  • Islamic Stockbroking
  • KenTrade Online Trading
  • Mobile Trading
  • Multi-Factor Authentication (MFA)
  • Payment and Deposit
  • Portfolio Management
  • Security
  • Settlement of Contracts
  • Technical Requirements
  • Updating of Existing KIBB Clients Information
  • Withdrawal of Funds via My Trust account

    • Islamic Stockbroking

    Islamic Margin

    What are the available Islamic Margin Financing products?

    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.
    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 11.00% p.a. 10.75% 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
    What is the Shariah concept applicable?

    The products are structured using the Shariah principles of Murabahah via Tawarruq arrangement.

    Mechanism of Commodity Murabahah:

    1. 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.

    1. The Bank then sells the specified commodity to the Client at Bank’s sale price to be paid on deferred payment terms as agreed.

    1. The client will appoint the Bank as agent to sell commodity to commodity buyer at a price equivalent to Bank’s purchase price on spot basis.

    1. Upon completion of the commodity sale transaction, the financing amount, equivalent to the Bank’s purchase price, will be made available under the facility for the client’s utilisation.
    What are my obligations?

    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

    M2-i:

    165% - No utilisation of the facility or withdrawal of security shall be permitted where the market value of the security falls below 165%.

    M3-i:

    180% - No utilisation of the facility or withdrawal of security shall be permitted where the market value of the security falls below 180%.
    Required Equity Ratio

    M2-i & M3-i :

    150% - Margin Call: Where the market value of the security falls below 150%, 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%.

    Failure to bring the security coverage to the Required Equity Ratio shall result in force selling of your securities on the fourth market day after the date of the margin call. You shall be suspended from buying any further securities under the Facility upon a margin call being made until the Required Equity Ratio is regularised to the satisfaction of the Bank.

     

    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.

    What if I fail to fulfil my obligations?

    If you fail to fulfill your obligations, the Bank has the right to be compensated by way of the following mechanisms:

    Force Sell Ratio

    M2-i:

    130% - Force selling: In the event that the market value of the security falls below 130%, 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% and above.

    M3-i:

    140% - Force selling: In the event that the market value of the security falls below 140%, 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% 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).