KUALA LUMPUR, Aug 20 ― The Malaysian government on Monday launched the Sukuk Prihatin with the target of raising RM500 million to aid the country’s economic recovery amid the Covid-19 pandemic, by opening up an opportunity to Malaysian individuals and companies to invest in the Shariah-compliant investment instrument or Islamic bond through the lending of their money to the government for two years.

Beyond helping with the government’s efforts in rebuilding the economy after the Covid-19 pandemic, Malaysians who choose to put money into Sukuk Prihatin will be able to get back the principal or initial sum at the end of the two years, along with profits at a fixed rate every three months during the two-year period.

Below is a quick highlight and summary of some of the key points in the government’s 61-page knowledge pack on Sukuk Prihatin:

1. What is it?

The government is the issuer of Sukuk Prihatin, which means the government has a direct obligation to the investor for the principal and the profit payments. The Sukuk Prihatin is a one-off issuance by the government.

It is poised as a gateway for Malaysians to unite and join in Malaysia’s economic recovery measures, with the knowledge pack stating: “Themed ‘Forwarding The Nation’s Future Together’ and #KitaUntukKita, the Sukuk Prihatin will carry nationalistic and patriotic elements to rally fellow Malaysians to participate in rebuilding the economy and the nation while enduring Covid-19 crisis.”

2. Who is it for?

To be eligible to invest in Sukuk Prihatin, you have to either be a Malaysian aged at least 18; or a company incorporated in Malaysia; or a cooperative, foundation, sole proprietor, partnership, association or other incorporated bodies operating in Malaysia. A registered trustee can act on behalf of any of the previous three categories, but will not be able to enjoy tax exemptions related to the Sukuk Prihatin.

With Sukuk Prihatin having a short two-year tenure, it is stated to be suitable for investors who “wish to diversify their investment portfolio and are comfortable taking a short-term risk with a minimum return on investments”.

3. How do you apply?

This is Malaysia’s first-ever digital sukuk, which means investors can apply during the subscription period from August 18 to September 17 to invest in Sukuk Prihatin via internet or mobile banking through the JomPAY and DuitNow platforms, depending on the banks involved.

Since Sukuk Prihatin is being offered fully digitally, applications cannot be made over the counter or through the ATM with such applications to be rejected and refunded.

There are 27 participating banks for both corporate and retail investors, with some either offering JomPAY or DuitNow e-channels or both.

Specifically for retail investors, they can subscribe to the sukuk via the internet or mobile banking through their accounts at: Affin Bank, Agrobank, Alliance Bank, Al-Rajhi Bank, AmBank, Bank Islam, Bank Muamalat, CIMB, Hong Leong Bank, Maybank, MBSB, Public Bank, RHB, Bank Rakyat, Bank Simpanan Nasional, Bank of China (Malaysia) Berhad, Citibank, HSBC, ICBC Bank, OCBC Bank, Standard Chartered Bank, or United Overseas Bank (Malaysia) Berhad.

But applications to subscribe to Sukuk Prihatin will be reviewed to see if all requirements have been met, with applicants to be informed 14 days after the offering period on whether they were successful and with refunds of the money to be done within five days if an applicant is unsuccessful.

4. How much is the minimum and maximum investment amount?

You can apply more than once to invest in Sukuk Prihatin which is on a first-come-first-served basis.

But the condition is that you have to use the same bank account to apply, and with each application to be at least a minimum of RM500 and in multiples of RM100. There is no maximum limit for how much can be invested.

What this means is if you were to apply to invest RM610 in Sukuk Prihatin, RM10 will be refunded to your account within five business days as only multiples of RM100 are allowed.

If you then decide to make another application to invest RM400 or any other amount below RM500, that would not be possible and you will need to top it up to at least RM500 when applying to avoid your application being rejected.

Only applications made from the bank account for the first application will be accepted, while subsequent applications from other bank accounts from the same or different bank will be rejected and refunded.

Make sure you will not need the money that you invested in Sukuk Prihatin for two years, as investors are not allowed to redeem or take the money out before the sukuk’s maturity date and with all such investments required to be held until the end of the two-year period.

You can’t sell off your holding in Sukuk Prihatin or transfer or assign it, which means you have to hold the sukuk which you bought until its maturity date of September 22, 2022.

(With lots sizes of RM100 and a minimum RM500 amount, Sukuk Prihatin is different from the traditional sukuk where institutional investors would have to invest in standard lot sizes of RM5 million.)

5. How much would you get in return for your investment?

At a fixed profit rate of 2 per cent per annum, putting in RM1,000 into Sukuk Prihatin will translate into a RM20 profit per year, which will then be paid to you in four tranches of RM5 for each quarter in a year.

At the same profit rate, putting in RM10,000 would mean a total profit of RM200 per year, which will then be divided into four to be paid to you in sums of RM50 for each quarter or every three months.

If the Sukuk Prihatin’s issue date is September 22, 2020, the first time you will receive your profit payment will be on December 22, 2020.

The government will continue to pay the profit payments to you every quarter until the end of the two-year period for Sukuk Prihatin (September 22, 2022), which will be also when you get your initial investment sum or principal back, unless you choose to donate either all or some of the principal to the government for spending related to Covid-19.

For example, if you decide to waive RM3,000 of your RM10,000 initial investment sum at the end of the two years, you will get RM7,000 back while the RM3,000 will go to a government-approved trust account.

The profit is tax-exempted but you will have to keep the monthly e-statement for Sukuk Prihatin for such purposes, while the waived or contributed amount will be tax-deductible.

You can choose whether to waive your principal when making the application, and can decide in the final quarter whether to change your decision or change the amount you wish to waive or contribute.

6. What will the funds be used for

According to the knowledge pack, the proceeds from Sukuk Prihatin will go to the Kumpulan Wang Covid-19 to fund measures announced in the government’s economic stimulus packages and recovery plan to address the Covid-19 crisis.

Examples of such measures include medical spending related to Covid-19, financing or grants for micro and small and medium enterprises especially women entrepreneurs, grants for research for infectious diseases, and improving connectivity to rural schools which will act as hubs to connect nearby villages, the government said.\

https://www.malaymail.com/news/malaysia/202...-yourse/1895447

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KUALA LUMPUR, Aug 17 — The Ministry of Finance (MoF) is expected to announce the issuance of Sukuk Prihatin, Malaysia’s first digital sukuk, amounting to RM500 million under the National Economic Recovery Plan (Penjana) in a ceremony tomorrow.

The MoF, in a statement today, said the opening ceremony of Sukuk Prihatin will be officiated by Prime Minister Tan Sri Muhyiddin Yassin and Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

The ceremony will be graced by the Yang di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah.

The ministry said the issuance of shariah-compliant Sukuk resulted from requests from various parties in their quest to assist in the country’s recovery efforts.

The Sukuk Prihatin issuance will be channelled to a number of initiatives that have been identified, including increasing connectivity for rural schools, accommodating research grants for infectious diseases, and financing micro-small and medium enterprises (MSMEs), especially women entrepreneurs, the statement said. — Bernama

https://www.malaymail.com/news/money/2020/0...obox=1597664590

Where to subscribe:

1) Maybank?
2) Hong Leong
3) BSN

Subscription period: 18th August to 17th September 2020.

This post has been edited by zstan: Aug 21 2020, 02:25 PM

Those with deep pockets probably can aim for this tomorrow. Interesting to see rates.

RM500 million....
kwsp take some
kwap take some
TH take some
affinhwang, Maybank, Cimb, PBB, HLB, kenanga, Eastspring, and other banks with asset mgmt fund houses each take some.....very fast no more...

That's true. Hopefully retailers got chance haha

I kinda doubt they'll take any. If the government needed their funds, they would have just issued normal MGS/GII.

I remember this Sukuk Prihatin is more charity then profit. Probably is zero coupon and is not issued and discount. I'm guessing

you are right...
as mentioned on 10 June 2020....

Sukuk Prihatin untuk kebajikan, bukan untuk pulangan

PUTRAJAYA: Rancangan menerbitkan Sukuk Prihatin bernilai RM500 juta bukan sebagai instrumen pelaburan pulangan tinggi tetapi adalah untuk memberi peluang kepada rakyat berkemampuan menyertai kerajaan membantu golongan terjejas ekoran pandemik COVID-19, demikian kata Menteri Kewangan, Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

Beliau menjelaskan, bon Islam yang dijangkakan diterbitkan pada suku ketiga 2020 itu, bertujuan untuk kebajikan dan bukan bermotifkan keuntungan, jadi kadar pulangan adalah lebih rendah berbanding instrumen pelaburan lain termasuk Sekuriti Kerajaan Malaysia (MGS).

Malah, katanya, mereka yang ingin melanggan sukuk berkenaan akan diberi pilihan untuk tidak menerima pulangan dan pembayaran balik modal atau prinsipal apabila ia matang kelak.

"Ia (terbitan Sukuk Prihatin) bukan untuk anda (pelabur) mendapat pulangan. Ia untuk membantu orang yang terjejas. Rancangannya untuk memberi peluang kepada rakyat Malaysia yang berkemampuan untuk menolong rakyat Malaysia yang terjejas dan terkesan kerana COVID-19," katanya.

https://www.bharian.com.my/berita/nasional/...-untuk-pulangan

This post has been edited by MUM: Aug 17 2020, 11:28 PM

Interesting. So this is a legitimate tabung Harapan?

How to get it?

Two-year RM500m Prihatin sukuk launched with 2% annual profit rate

KUALA LUMPUR (Aug 18): The Sukuk Prihatin programme, touted as the first ever digital sukuk in Malaysia, was launched today as part of the government’s National Economic Recovery Plan (Penjana).

The sukuk, which is based on the principle of Tawarruq via the Commodity Murabahah arrangement, has a total target issuance of RM500 million with a maturity period of two years, said the Ministry of Finance (MoF) in a statement today.

It offers a profit rate of 2% per annum, which will be paid on a quarterly basis and will be exempted from tax.

“The syariah-compliant sukuk issuance is established in response to requests by various parties to contribute towards the country's recovery efforts. To that end, the government decided that the sukuk issuance is a transparent and appropriate instrument in response to those requests,” said the MoF.

“Sukuk holders have the option of donating the principal amount upon its two-year maturity.

"Proceeds from the Sukuk Prihatin will be channelled to the Kumpulan Wang Covid-19 for the implementation of economic recovery measures that include, among others, enhancing connectivity to rural schools, supporting research grants for infectious diseases, and financing micro SMEs, particularly women entrepreneurs,” it added.

The programme is open to Malaysians aged 18 years and above. They may subscribe to the programme through JomPay or DuitNow, which are accessible through the mobile banking platforms of 27 participating banks in Malaysia.

Maybank is the main distribution bank for this sukuk. The sukuk will be distributed on a first-come first-served basis, and is available from Aug 18 to Sept 17.

Interested parties can take part in the programme with a minimum RM500 investment.

The sukuk programme was launched by Prime Minister Tan Sri Muhyiddin Yassin in a ceremony witnessed by the Yang di-Pertuan Agong Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah Ibni Almarhum Sultan Haji Ahmad Shah Al-Musta'in Billah.

https://www.theedgemarkets.com/article/twoy...ual-profit-rate

2% only... It's indeed priced correctly between the current 1-year and 3-years MGS yield. https://www.investing.com/markets/malaysia



Anyway, is there a secondary market?



This post has been edited by TOS: Aug 18 2020, 12:08 PM

Oooo not bad. Same rate as FD. not zero returns at least.

2% per annum is not bad. At least got some returns, though the normal government bonds with equivalent tenor has coupons of around 3% - 4%

If sukuk prihatin can be made to subscribe so easily, I wish the same can be done for the other Government bonds like the MGS and MGII. Probably just need to build a robust secondary market platform and retail player can finally enter the bond market rd.

Still for country, I might subscribe RM500. Though I prefer to keep the principal

damn... was expecting better rate. Long time no see sukuk since the last one by bijan.

this is more legit to 'help' the country than the dubious Tabung Harapan.

careful...if politized...
"more legit" is the word used by the beholder or its supporters...
for the opposite camp will said....what is legit when it came from the backdoor?

2% only, I think put in ASNB better. I expect them to still give at least 4% this year.

LOL... Testing123

This post has been edited by IamNOT: Aug 18 2020, 03:52 PM

well it's true. this sukuk is for all to see and vet through. tabung harapan already up in smokes.

eh how u bought

What is the meaning of " rights to waive the principal
upon maturity"?

If the money keep inside the fund without withdraw at the maturity, what will the government use for the fund since the fund already ended (one-off sukuk)?

https://www.hlb.com.my/en/connect/sukuk-prihatin-tnc-en.html