Are you considering to invest in Sukuk PRIHATIN issued by the Malaysian government? Learn the pros and cons of investing in Malaysia’s 1st ever digital sukuk issuance. Investment is super easy and from as low as RM500 with tax incentives.

What is Sukuk Prihatin

Malaysia on August 18 launched Sukuk Prihatin as part of Malaysia’s National Economic Recovery Plan aka Pelan Jana Semula Ekonomi Negara (PENJANA). It has been launched in response to the public’s request to participate and contribute to the the rebuilding of our nation post-COVID-19.

Key Facts About Sukuk Prihatin

Sukuk Prihatin is an investment product in Islamic fixed income securities (sukuk).

  • Issuer: Government of Malaysia
  • Sukuk size: up to RM500m nominal value
  • Profit rate: 2% p.a.
  • Profit payment frequency: quarterly
  • Sukuk tenure: 2 years
  • Shariah compliant: yes
  • Subscription Period: August 18, 2020 to September 17, 2020 (or earlier subject to fund size being met or Government of Malaysia discretion)
  • Issue date: September 22, 2020
  • Maturity date: September 22, 2022
  • Minimum investment: RM500 and in multiples of RM100
  • Maximum investment: none
  • Primary distribution bank: Malayan Banking Berhad (Maybank)
  • First ever digital sukuk in Malaysia
  • Based on Islamic principle of Tawarruq via Commodity Murabahah arrangement

Tawarruq: involving 3 parties purchase Shariah-compliant commodity from seller with a mark up price on deferred payment basis & the buyer sells the same commodity to a third party on spot payment basis

Sukuk Prihatin objective is to help support the Malaysian economy and channeled to Kumpulan Wang Covid-19 for implementation of economic recovery measures including but not limited to:

  • Medical expenditure related to Covid-19
  • Supporting research grants for infectious diseases
  • Financing/grants for micro enterprises especially women entrepreneurs
  • Enhancing broadband connectivity to schools especially in rural areas which serve as hubs for villages

How to Invest in Sukuk Prihatin

Eligibility:

  • Malaysian citizen age 18 years old and above (at closing date of offering)
  • Company or corporation incorporated in Malaysia (excluding Financial Institutions) and Capital Markets and Services License holder carrying on business of fund management
  • Cooperative, foundation, sole proprietorship, partnership, association of other incorporated bodies operating in Malaysia
  • Registered Trustee who acts on behalf of eligible buyer/applicant

Investment platforms:

  • JomPAY
    • Biller Code: 28670 (invest only) OR
    • Biller Code: 14076 (waive/donating principal at maturity)
    • Ref 1: Contact Number (i.e. 01xxxxxxxx with no spacing)
    • Ref 2: Email Address (compulsory to get e-statement for tax relief)
  • DuitNow
    • Business Registration Number (BRN): SUKUKP20PEL (invest only) OR
    • BRN: SUKUKP20SUM (waive/donating principal at maturity)
    • Recipient Reference: Contact Number (i.e. 01xxxxxxxx with no spacing)
    • Payment Details: Email Address (compulsory to get e-statement for tax relief)
    • Date: current date
  • Online Banking

Tip: Print transaction confirmation slip and keep reference number for record purposes.

(Source: Sukuk Prihatin Knowledge Pack – Click to enlarge)

Pros

  • Considered risk-free as bond by Government of Malaysia and sukuk as direct obligation as issuer
  • Issued in Ringgit thus no forex currency risks
  • Small minimum investment of RM500
  • Opportunity to diversify investment portfolio
  • Short sukuk duration of 2 years
  • Easy subscription via JomPay, DuitNow and online banking
  • Special tax treatment with profit from sukuk tax exempted
    Note: not applicable to all financial institutions, Capital Market Services holder carrying on business of fund management, and registered trustees acting on behalf
  • Option to waive the principal amount due which will be treated as a donation to a Government approved donation fund

Cons

  • Returns of 2%, although comparable to FD rates, is lower than most Malaysian bond yields which may be unattractive for higher yield seekers

Overall

While the overall profit rate is on the low side, it is a good way to get virtually risk-free returns, possibly tax incentives and support our nation’s rebuilding post-Covid-19.

 

Forwarding The Nation’s Future Together #KitaUntukKita

FAQ for Sukuk Prihatin

Q: What is the difference between Sukuk Prihatin Pelaburan and Sukuk Prihatin Sumbangan?
A: Sukuk Prihatin Pelaburan is for investment only while Sukuk Prihatin Sumbangan has the principal waived/donated at maturity.

Q: Can I trade (buy or sell) or transfer the Sukuk Prihatin?
A: No

E&OE. For financial education purposes only and not to be taken as investment advice.

 

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