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Wednesday November 4, 2009

Islamic finance players urged to take the lead

KUALA LUMPUR: Islamic finance players must take the lead in further strengthening the architecture of the sector to attract global Islamic fund management companies to establish their operations in the country, said Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop.

He said players should continue embarking on extensive marketing and promotions as these efforts were particularly essential in creating attractive environment for the benefit of both parties.

“Vigorous efforts are required to drive innovation to meet the changing requirements and innovation is key to value-adding the future of Islamic finance,” he said at the KLIFF Islamic Finance Awards Dinner 2009 yesterday.

“The greater challenge is to enhance our global position, particularly given the increasingly intense competition in this fast-growing segment of the international financial market,” Nor Mohamed said.

Meanwhile, he disclosed that Malaysia’s bond market like sukuk has maintained its dominance, currently accounting for 58% of the total bond market.

He added that sukuk issuance totalled RM6.4bil, with three large issues of between RM1bil and RM2.5bil so far.

“Up to October, sukuk issuance totalled RM26.1bil, accounting for 54% of total bonds issued amounting to RM48.6bil,” he said.

Nor Mohamed said Islamic securities had also maintained its dominance, with about 87% of the listed securities on Bursa Malaysia being syariah-compliant, which account for some 65% of market capitalisation.

On the unit trust industry, Islamic funds currently account for 12% of the total net asset value of the industry and its growth has been encouraging, he added. — Bernama

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