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Global Journal of Management and Business Research
Volume 11 Issue 3 Version 1.0 March 2011
Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals Inc. (USA)
Emergence and Growth of Structured Finance in Malaysia
By Ravindran Ramasamy, Ganisen Sinnasamy,Mohd Hanif Mohd Helmi
University Tun Abdul Razak Malaysia
Abstracts - Global financial crisis threatens the genuine investors and institutional investors who
have parked their funds in financial assets. The developing countries follow the models and
financial products especially the structured products the developed countries introduce and
trade in their countries’ capital markets. Malaysia also has introduced these financial products in
Bursa Malaysia and allowed trading. In this article we try to trace the growth of these products
both in Islamic and conventional segments of capital market. Our aim is to give an over view of
the different kinds of structured products, their features and differences among them. We point
out the inherent risks in these products and how it is difficult to quantify when they are not based
on cash flows and reference portfolio of assets. We caution the regulatory bodies to be vigilant
about exotic structured products such as synthetic CDOs and CDO2 which are highly unreliable
and not based on any underlying and cash flows.
Keywords : CDOs; Tranches; Obligors; Sukuk; Portfolio; Default; SPVs; SMEs; Entrepreneur
Classification: GJMBR-B JEL Classification: L26, G32
EmergenceandGrowthofStructuredFinanceinMalaysia
Strictly as per the compliance and regulations of:
ISSN: 0975- 5853