index, which by design is replicable and transparent. the listing of the abf malaysian bond index fund today will not only add to the diversity of listings on bursa malaysia but would also pave the way for the increased introduction of other more innovative products in the future. in view of the prevailing dynamic and often volatile financial environment, this development is important to meet the differentiated demands of investors for a broader range of financial products at more competitive prices and through more efficient and convenient channels. the listing of the exchange traded fund on bursa malaysia will also raise awareness and generate interest of domestic and international investors in our bond market, thus contributing towards the development of a deeper and broader bond market in malaysia. the launch of the malaysian bond exchange traded fund would not have been possible without the close cooperation and support of many parties. in particular, i would like to thank the securities commission, bursa malaysia, the association of stock broking companies in malaysia, aminvest, the fund manager and the market makers for their contributions and commitment in working with the central bank to make the listing of the abf malaysian bond index fund a reality. the remarkable and strong partnership between the regulators and the industry has been important in resolving significant regulatory as well as operational challenges in order to make the listing of the abf malaysian bond index fund possible. indeed, it represents a strategic cooperation that contributes to improve the overall growth of the financial market. 1 / 2 i would also like to thank ammerchant bank, cimb and maybank for their participation as the participating dealers. i also wish aminvest, the fund manager, every success in managing and promoting the fund. 2 / 2

on the labuan international financial exchange ( lfx ) on the 28th of january 2004 increased the market capitalisation of the exchange to usd 2. 95 billion ( rm 11. 2 billion ). the bahrain - based international islamic financial market ( iifm ) has also endorsed the sukuk in september 2003. the labuan financial exchange has signed an mou with iifm to establish a framework for greater co - operation and to pave the way for both organizations to jointly develop an islamic capital market with greater global reach. the importance to innovate and develop appropriate risk management tools is clear. there are unique challenges to manage in developing derivative products for islamic banking and finance because the end product must not only be syariah compliant, in form and substance but also be globally attractive to all customers. while islam encourages risk management in financial transactions, the tools or instruments used in such management must not have the prohibited elements of riba ( interest or usury ), gharar ( uncertainty ) and maysir ( gambling ). certain basic islamic financial products already exist that offer the benefits of hedging. the bai ’ as - salam contract, for instance, is essentially a forward contract where two parties agree to carry out a sale / purchase of an underlying asset at a pre - determined future date, but at a price negotiated and fully paid today. the istisna contract is an example of a futures contract where a buyer contracts with a manufacturer to manufacture a product at a future date. a more interesting example is the istijrar contract, introduced in pakistan, which includes the characteristics of a put and call option, allowing the buyer to cap the purchase price, and the seller to set a floor for the selling price. there is still considerable debate amongst islamic scholars about the acceptability of the various forms of derivative products from the perspective of islamic jurisprudence. hence, there is a need for more investment in intellectual capital in the field of islamic finance to promote innovation that integrates the appropriate syariah principles within the islamic financial instruments. our efforts to keep abreast with such developments will facilitate more rapid development of islamic financial instruments for the purpose of risk management, using derivatives. it is evident that the derivatives business has global opportunities since risk in today ’ s financial environment is a product of uncertainties prevailing in the global markets, whether financial or non - financial. the isda master agreements have been the universal means of bringing order and certainty to the complex and rapidly developing world of