BIFS3033 Islamic Capital Market

Individual Take-home Assignment

Name: __________________________________

Matric No.: ______________________________

1. Suppose ABC Islamic Bank invests RM5.0 million in Gayaz Islamic Bank for a period of
three months, with a profit sharing ratio of 90:10. Public Bank at this point of time,
would not know the exact rate of return as the formula is only crystallized into actual
figures towards the end of the three month period. However, based on the Gayaz
Islamic Bank prevailing record, the expected gross rate is 8%. At the end of the
investment period, actual gross rate for one year’s investments is 9% per annum,
calculate the profit ABC Islamic Bank received for the three-month of investment.

2. Supposing that the Malaysian government issues RM2.0 million of GIC with a rate of
return equal to 4.5% per annum. This issuance of GIC is for a period of 3 years from
the issuing date. Compute the proceed for the GIC.

3. RHB Islamic accepts deposit placement from depositor A, say RM 2.5 million. RHB
Islamic issues Islamic Negotiable Instruments of Deposits (INID) under Al-
Mudharabah concept as evidence of the deposit with the following terms: -
Issue date: 13/3/2019 Maturity date: 12/3/2020
Nominal value: RM2,500,000
Profit-sharing ratio: 75:25 (75% to customer)
Dividend Payment: Quarterly basis First Dividend date: 13th June
Dividend rate: 8.5% p.a
 i) Compute redemption proceeds if depositor A decided to sell the INID for
value August 20th, 2019, to investor B with the expected dividend rate of INID
is 10.4%, compute proceed received by depositor A.

4. BIMB hold long position of RM 1.5 million, hence they decided used all surplus cash
to purchase NIDC on 7 May 2019 at a yield of 5.2% p.a. The NIDC was issued on 10
March 2019 and will be matured on 10 October 2019.
i. Compute the price per 100 nominal values of an NIDC.

ii. Compute the total proceeds paid by the BIMB for his purchase of NIDC

5. Maybank Islamic purchases an NIDC with nominal value of RM 2.5 million on 25 June
2018. The NIDC was issued with the following features:
Issue date: 25 April 2018 Maturity date = 25 October 2019
Yield: 7.8% p.a
Coupon dates: every 25 April and 25 October each year

i. Compute the price for this NIDC

6. On 18 March 2018, Kuwait Finance House placed RM 2.3 million deposit in Royal
Islamic Bank. As evidence of deposit placement, Royal Islamic bank issued NIDC
which will be matured on 18 March 2020. The yield for this NIDC is 4.5% p.a which
will be paid every 18 June and 18 December each year. However, the first coupon
payment would be three months after the issue date, which is on 18 June 2018.
Assume that the Kuwait Finance House sold the NIDC to another investee bank on 20
October 2018. Please show your timeline to answer the following question:

i) Compute the price for this NIDC

 ii) Assume that the Kuwait Finance House sold the NIDC to another investee
bank on 20 October 2018. Compute the proceeds received by Kuwait Finance
House.

7. Malaysian importer issued RM 1,000,000 Islamic Acceptance bill (AB-i) under

Murabahah contract on 31 January 2019 and will be matured on 31 May 2019. The
AB-i is accepted by the CIMB Islamic bank at 7.0% p.a.

i) What is the maturity value of this AB-i?

ii) CIMB Islamic bank decides to sell the AB-i to the Lloyd Islamic Bank at 6.63%
on 3 February 2019. Draw timelines to show details of this transaction.
Compute the selling price of this AB-i and profit generated by the CIMB
Islamic Bank for selling the AB-i to Lloyd Islamic Bank.