Malaysia's Islamic financial sector to reach RM3 trillion, says Wahid


  • Markets
  • Wednesday, 17 Jun 2020

Tan Sri Abdul Wahid Omar said as of March this year, Shariah funds valued at RM170 billion represents 23 per cent of total industry asset under management (AUM) while Shariah unit trust fund’s net asset value (NAV) of RM99 billion represented about 23 of the overall industry NAV.

KUALA LUMPUR: Malaysia’s Islamic financial sector is expected to sustain double-digit growth to reach almost RM3 trillion in 2020 under the second Capital Market Masterplan, according to Tan Sri Abdul Wahid Omar.

The chairman of Bursa Malaysia Bhd said the country’s Islamic funds industry has demonstrated impressive growth.

As of March this year, Shariah funds valued at RM170 billion represents 23 per cent of total industry asset under management (AUM) while Shariah unit trust fund’s net asset value (NAV) of RM99 billion represented about 23 of the overall industry NAV.

"Continued promotion by the asset management industry can help contribute to a greater awareness of Shariah investing to a broader group of investors.

"There are opportunities for further product innovation and development to provide a more extensive array of Shariah-based products for the industry, ” said Abdul Wahid in his keynote address at Shariah Investing Virtual Conference 2020 here today.

Malaysia according to him, is widely acknowledged as at the forefront of Islamic finance, taking the lead in promoting socially responsible proposition based on its shared values with Islamic finance.

The country is the third-largest market for global Islamic finance products and the world’s largest Sukuk issuer.

In 2019, Malaysia ranked first in terms of Islamic funds AUM with 34 per cent of the global share, he said.

Bursa Malaysia as pointed out by Abdul Wahid had also firmly established itself as the global leader for Shariah listing and investments.

"Bursa Malaysia-i, our end-to-end Shariah-compliant investing platform offers a comprehensive range of exchange-related facilities including listing, trading, clearing, settlement and depository services.

"Supported by 16 Islamic brokers, Bursa Malaysia-i offers both faith and ethical based investors access to a broad spectrum of opportunities listed on Bursa Malaysia, ” he said.

As at May 2020,732 out of 932 listed companies on the Exchange, or 79 per cent, are Shariah-compliant, with Shariah market capitalisation makes up 70 per cent of the total market capitalisation of RM1.6 trillion. he said.

The average daily trading value of Shariah-compliant securities makes up 70 per cent of the overall the average daily volume (ADV) of RM2.8 billion with Shariah indices consistently outperformed its conventional counterparts over the last ten years, said Abdul Wahid.

"The FTSE Bursa Malaysia Hijrah Shariah Index, comprising the 30 largest Shariah-compliant companies on the FTSE Bursa Malaysia EMAS Index, has consistently outperformed the FTSE Bursa Malaysia KLCI, growing about 32 per cent between 2010 and May 2020.

"These facts serve to suggest that Shariah-compliant investments are an attractive source of value for investors, ” he added. - Bernama

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