Islamic Banking

Malaysia Sets Out Stall as Shariah Centre

Stephen Harris, 13 August 2008

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The Securities Commission in Kuala Lumpur will issue another group of Islamic fund management licences by year-end, in addition to the three already granted to Kuwait Finance House, DBS Bank of Singapore and CIMB-Principal, according to InvestorDaily.

SC chairman Datuk Zarinah Anwar said the move was aimed at promoting

Malaysia as an Islamic fund management centre and global centre of excellence for Islamic fund managers: “The Islamic capital market has thrived to the extent that it now accounts for a highly significant portion of the overall Malaysian capital market,” she said.

She said Malaysia had an attractive Islamic equity value proposition with 85 per cent of companies listed on Bursa Malaysia, accounting for a third of total market capitalisation, being shariah-compliant.

“Some companies going for initial public offerings are voluntarily seeking to have their shariah-compliant status determined by the Malaysian Sharia Advisory Council,” she added. The council, established in 1996 by the Securities Commission, is the sole authority for issuing rulings and guidelines on the Islamic capital market.

She said the sukuk (Islamic bonds) market in Malaya had experienced unprecedented growth with the country established as one of the largest issuers of sukuk over the years: “In the first six months, 22 sukuk issues valued at RM17.7 billion ($5.3 billion) were approved, accounting for 31 per cent of total bonds approved during the period.”

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