Malaysian Islamic capital market now worth RM1.5 trillion

Malaysian Islamic capital market now worth RM1.5 trillion

April 30, 2014

The Malaysian Islamic capital market (ICM) which grew by 8.8% in 2013 is now worth RM1.5 trillion and continues to be an integral component of the local capital market.

The Islamic capital market now accounts for 56% of the overall Malaysian capital market, said the securities commission deputy chief executive, Datuk Dr Nik Ramlah Mahmood.

“Seventy-one percent of our public listed companies are designated as shariah compliant.

“We also maintained our position as the largest sukuk issuer in the world, accounting for 69% of the global sukuk issuance,” she said at the BNP Paribas-INCEIF Centre for Islamic Wealth Management Symposium today.

She said better wealth creation and investment opportunities for investors had also been made available by increasing the number of full-fledged Islamic fund management companies in Malaysia.

“Our Islamic fund management industry with RM97.5 billion in assets under management is managed by 19 asset management companies licensed to exclusively manage shariah compliant funds.

“Of the total assets under management, RM42 billion is in the form of shariah compliant unit trust funds which grew by 21% in 2013,” said Nik Ramlah.

“Of particular relevance to the Islamic wealth management industry is the fact that Malaysia now has 52 Islamic wholesale funds with almost 15 billion units in circulation with a total net asset value (NAV) of 16.43 billion.

“This represents almost 28% of the NAV of all wholesale funds in Malaysia.

“While it is clear that the local ICM has supported domestic growth by offering a multitude of financing and investment opportunities to domestic businesses and investors, it also continues to leverage on Malaysia’s core strengths to make very significant strides in the international arena and is now increasingly more integrated with the international market,” she added.

According to Nik Ramlah, a milestone was achieved in this regard with the introduction of the revised screening methodology of listed stocks.

“The two-tier quantitative approach introduced in 2013 further aligns our screening process with international practices, thus paving the way for a greater inflow of foreign Islamic funds into the domestic markets.

“By also incorporating a two-tier quantitative benchmark approach comprising business activity and financial ratio benchmarks, the adoption of the revised methodology is envisaged to further enhance the attractiveness of the Malaysian Islamic equity market and fund management segments to international investors.

“With this in place, the wealth management industry should gain more traction with a wider market, especially from investors looking for Shariah compliant wealth management solutions,” she said.

The symposium, jointly organised with the Labuan International Business and Financial Centre, attracted more than 150 delegates.

A total of six speakers and panelists, ranging from regulators, Islamic scholars, academicians and industry practitioners, convened to share their insights and knowledge of the Islamic wealth management industry.

During the one-day symposium, speakers and delegates deliberated on practical issues and challenges in further developing the Islamic wealth management industry and its relevant management structures, such as the Labuan Islamic Trusts and Foundations, to gain a competitive advantage in establishing Malaysia as a preferred Islamic wealth management destination.

At the end of the symposium, chairman of BNP Paribas-INCEIF Centre for Islamic Wealth Management (CIWM) advisory board Datuk Dr Syed Othman Alhabshi said more awareness programmes need to be created, especially for high net worth individuals and financial wealth managers to promote Islamic wealth management in Malaysia.

Labuan IBFC’s chief executive officer Saiful Bahari Baharom said Malaysia had the infrastructure and expertise in the Islamic finance space to develop a strong competitive value proposition in shariah compliant wealth management.

“The Islamic wealth management value chain is long, starting with the acquisition of assets, advisory and management services, in addition to legal, taxation and shariah advice, alongside trust and custodial services. Right at the end is the distribution of the assets.

“Each of these parts contributes to a specific value-added competency that we must strive to enhance to help grow our domestic high-value wealth management industry,” he added. – Bernama, April 30, 2014.


Wednesday, April 30th, 2014 EN

No comments yet.

Leave a comment

You must be logged in to post a comment.