Subscribing to Sukuk Prihatin Malaysia aka Malaysia Patriot Bonds ? 2% returns only. - closed already 2022

Just a couple of days ago, the current Malaysian government (Perikatan National) administration launched a RM 500 million fund raising initiative called Sukuk Prihatin under the National Economic Recovery Plan (Penjana). Sukuk Prihatin is basically a government Islamic bond where the money raised will be used to support the current economy which is at a decline due to the Covid19 situation. The Sukuk programme was launched by Prime Minister Tan Sri Muhyiddin Yassin in a ceremony witnessed by the Yang di-Pertuan Agong.

The funds raised by the government from Sukuk Prihatin will be channeled to Kumpulan Wang Covid-19 to fund measures announced in the government’s economic stimulus packages and recovery plan to address the Covid-19 crisis.

Sukuk Prihatin will have a payout of 2% (yes, just 2%) per annum for 2 years (profits tax exempted). The minimum amount to subscribe is RM 500. Application for the Sukuk Prihatin can only be done online via all the local bank's Internet Banking facility (eg Maybank, Ambank, Public Bank, BSN...) and hence the government is naming it the 1st digital sukuk in Malaysia. Purchases of the Sukuk Prihatin cannot be done by branch walk in.

WARNING : Do note there are 2 kinds of applications to the Sukuk Prihatin. Sukuk Prihatin Pelaburan and Sukuk Prihatin Sumbagan. Do not get it wrong, the Sukuk Prihatin Sumbagan is like a donation of your money to aid the government while the Sukuk Prihatin Pelaburan is the one that will give a payout of 2% and get back the principle amount upon maturity of the Sukuk. 

I opted to test out subscribing to the Sukuk Prihatin Pelaburan for just RM500. Most banking websites will have the similar procedures, and to subscribe you just need to transfer to a business registration entity using DuitNow with the following code SUKUKP20PEL (for Sukuk Prihatin Pelaburan). For Sukuk Prihatin Sumbagangan, the code is SUKUKP20SUM. 

You need to enter your email address into the payment details and also put your mobile number in the recipient reference. The email address is for fund related notifications to be sent. For my case, I used Ambank internet banking Amsecure to subscribe to the Sukuk Prihatin. 

The returns (only 2%) of this Sukuk is nothing spectacular, it is just like a fixed deposit that is backed by the Malaysian government so defaults on it is super highly unlikely. RM10,000 would mean a total profit of RM200 per year. However, do subscribe to it if you feel like you want to do some national duty to help the Malaysian government, this initiative is timely patriotic initiative just before Malaysia's national day. 

The Sukuk Prihatin reminds me of the Tabung Harapan fund by the previous administration (Pakatan Nasional). The big difference is Tabung Harapan fund was a donation fund, there were no returns on your investment. All the money put into Tabung Harapan were used to reduce Malaysia's debt. As such, I view Sukuk Prihatin as a better idea than Tabung Harapan.

Updates 20200824

I just check and found local banks (checked Public Bank, Maybank)  only giving fixed deposits (FD) interests at below 2% (~1.75%) now. Only promotional FD will have fixed rate of 2% returns. As such, we can say that the returns from Sukuk Prihatin is better than FD rates. There are possibly bond funds which are able to provide returns of 3%-4% but Sukuk Prihatin from a risk perspective is risk free because is guaranteed by the government.

I miss those days where the government can issue bonds/sukuk instruments with a  5% fixed interest/profit rate (think Bond Merdeka). Those were the good days where people were rushing to pour money into the 5% interest/profit rate while banks were giving only 3% interest/profit rate.

Updates 20201005

Sukuk Prihatin statement of accounts was sent out today by Maybank. Although I applied through Ambank, Maybank is the bank that is arranging the Bond fund (Sukuk Prihatin).

In addition, apparently Sukuk Prihatin was oversubscribed by RM111 million. As a result, finance ministry has upsized the fund from RM500million to RM666million. 

Word is the government will be launching another series of Sukuk Prihatin but with much lower profit rates.

Updates 20201130

Overall I'm quite satisfied with this savings investment, all interest rates offered by banks are at the lowest in history. Getting 2% in this covid19 environment is fair. It's not going to beat inflation but at least capital is preserved slightly.

Updates 20201202

The Sukuk Prihatin statement is sent via Maybank monthly. The statement is in a password protected PDF. So far no profit yet as it's only the 1st month.

Updates 20210624

Finally, got my tiny dividends from Sukuk Prihatin.

Updates 20221007

Sukuk Prihatin has matured on 20220922 and all monies have been deposited back to all the subscriber's bank accounts. If the government of Malaysia launches another such Sukuk, it's got to have a much higher interest rate as the bank interest rates have risen a lot.

🔗Explanation on Bonds and Sukuk

Bonds are a form of debt. It is a loan from investor to a company or government. So, bond investors are paid interest. The Islamic equivalent of bonds are called sukuk. Sukuk form a large chunk of the Malaysian bond market. As at end-October 2020, 63.5% of the Malaysian total bond market size of close to RM1.6 trillion were sukuk.

Government issue bonds / sukuk to raise money for development expenditures, working capitals and to promote the growth of the country.

🔗Sukuk Prihatin Terms

Here's the terms for Sukuk Prihatin. 

🔗Links

https://www.malaymail.com/news/malaysia/2020/08/20/sukuk-prihatin-how-you-can-help-malaysia-while-earning-something-for-yourse/1895447

https://www.thestar.com.my/business/business-news/2020/08/19/ambank-research-positive-on-govts-rm500m-islamic-sukuk-prihatin

https://www.hmetro.com.my/bisnes/2020/08/611777/sukuk-prihatin-boleh-dilanggan-bermula-rm500v

https://www.bharian.com.my/berita/nasional/2020/08/722286/sukuk-prihatin-bantu-pemulihan-ekonomi-negara

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