KUALA LUMPUR (Dec 12): Bursa Malaysia Derivatives Bhd launched the cash settled FTSE4Good Bursa Malaysia Index Futures (F4GM) contract on Monday (Dec 12), which is the exchange’s first environmental, social and governance (ESG)-based futures contract.

The exchange said F4GM, with FTSE4Good Bursa Malaysia (F4GBM) Index as its underlying instrument, aims to meet the growing demand from Malaysian investors to include sustainable investment themes into their portfolios.

The F4GBM Index measures the performance of more than 80 Malaysian public listed companies (PLCs) from across the small, medium and large market capitalisation segments that demonstrate strong ESG practices.

Bursa Malaysia Derivatives explained that the F4GBM Index provides a benchmark to make investments in PLCs with rated and screened ESG practices, while the new F4GM offers a cost-effective solution for investors to gain exposure to all constituents of F4GBM via a single futures contract.

“The launch of F4GM is in line with the exchange’s aspiration to offer a diverse range of products for responsible investing. With F4GM, Malaysian investors will be able to align their financial goals with their ESG values,” Bursa Malaysia Derivatives acting director Mohd Saleem Kader Bakas said in a statement.

“It is also a new avenue that will enable more capital to flow towards sustainable investments, supporting the growth of ESG-compliant Malaysian PLCs and benefiting Malaysia's economic growth overall,” he added.

Priced at RM50 per F4GBM index point, the F4GM will be made available for trade starting Monday via global electronic trading platform CME Globex. This contract will also be included in the after-hours (T+1) trading session.