BIMB Investment targets RM150m for ESG fund

RAM Ratings said in line with the downward bias in global interest rates and the subsequent search for yields, domestic bond yields also retreated across the entire maturity spectrum and rating bands in June.

KUALA LUMPUR: BIMB Investment Management Bhd (BIMB Investment) targets to reach a RM150 million fund size within a year for its newly launched BIMB ESG Sukuk Fund, the world's first environmental, social and governance (ESG) sukuk fund.

Chief Executive Officer Najmuddin Mohd Lutfi said the fund was the first to offer subscriptions in ringgit, US dollar and Singapore dollar.

“Our target is to get both corporations and individuals into this fund at a 50:50 ratio and expect most of the investments to be in ringgit,” he told a press conference after the fund's launch on Wednesday.

Najmuddin said the fund has a potential annual income distribution of five per cent which provides a stable income stream and capital appreciation.  “We will invest in sukuks both locally and internationally.

“Investments will be made in ringgit-denominated sukuk rated at least A3 or P1 by RAM Ratings and BBB- or A3 by Standard and Poor's, or equivalent ratings by local rating agencies, for non-ringgit denominated sukuk,” he said.

Najmuddin said the sustainability analysis of each company the fund invests in would be made using UK-based Arabesque Asset Management Holding Ltd's proprietary S-ray machine learning and big data technology screening system.

The system is the first of its kind in the world to assess a company's ESG score on a daily basis.

“It will analyse the performance of companies according to the United Nations Global Compact normative principles of human rights, labour rights, and environment and anti-corruption practices. 

“The robust and deep ESG analysis provides insights and better understanding of a company's management quality and its positioning for long-term success,” he said. 

Meanwhile, Chairman Nik Mohd Hasyudeen Yusoff said Malaysia is leading in the number and value of sukuk issued. 

“Malaysia is evolving into a sustainable and responsible investment hub, supported by its prominent global presence in Islamic finances,” he added.  

According to RAM Ratings, as at June 2018, total global sukuk issuance slipped 5.2 per cent year-on-year to US$50.3 billion (US$1 = RM4.07).  

However, Malaysia increased its sukuk issuance to US$19.4 billion, translating into a healthy 38.7 per cent market share of global sukuk issuance.  

Nik Mohd Hasyudeen said Malaysia had emerged as the largest sustainable and responsible investment (SRI) market in Asia excluding Japan and second in the world in Islamic funds, with a market share of US$56 billion of global total assets under management. 

"With the rapid growth of the global SRI market segment, Malaysia's capital market has a huge opportunity to lead the region in SRIs as the country benefits from being well-positioned with strong investment fundamentals,” Nik Mohd Hasyudeen said. - Bernama

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