Singapore Exchange (SGX) has announced that its Singapore Kilobar Gold Contract has become the world’s first Shariah-compliant gold futures. Here are three fast facts about it:
1. Singapore Kilobar Gold Contract Was Launched in October 2014.
The SGX launched Kilobar, the world’s first exchange-traded, physically delivered gold futures in October 2014, in partnership with the World Gold Council and the Singapore Bullion Market Association.
The Singapore Kilobar Gold Contract seeks to serve as a transparent and centralised Asian price-discovery platform for the gold market. Globally, about 60% of the precious metal is traded in Asia.
2. Amanie Advisors Certifies Kilobar Gold Contract As Shariah Standard-Compliant
Amanie Advisors, a leading advisory firm specialising in Islamic finance solutions, has certified Singapore Kilobar Gold Contract to be in compliance with the Shariah Standard on Gold as set out by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
This makes the SGX physically settled futures contract a world-first in compliance with the AAOIFI Shariah Standard on Gold.
“This unlocks a new investment and risk management option for the rapidly growing Islamic finance industry estimated to hold about $2 trillion in assets. It also strengthens Singapore’s position as an international centre for Islamic finance, and builds on our vision to develop a global trading hub for gold,” said William Chin, Head of Metals and Bulk Commodities at SGX,
3. New Standard to Increase Demand for Gold in South East Asia
Natalie Dempster, Managing Director for Central Banks and Public Policy at the World Gold Council, said the certification could result to a considerable increased in demand for gold in the Southeast Asia region.
“This will offer investors a great way of buying kilobars via an exchange,” he said
Albert Cheng, Chief Executive Officer of the Singapore Bullion Market Association, said, “I am excited to see the SGX contract obtaining Shariah compliance – it will be attractive to new customers in the region, particularly Indonesia and Malaysia. This development will also drive innovation in Islamic investment products.” – BusinessNewsAsia.com