Islamic Banking

Too Few Shariah Products, Say Malaysian Investors

Stephen Harris, 31 October 2008


The growing Islamic finance industry has yet to catch on with wealthy Asians, who say there are too few shariah products to invest in, the private banking arm of

Malaysia's second largest lender has told Gulf Daily News.

Shariah investing is important in the
Middle East and has appealed to non-traditional centres such as

London and

Singapore, but Asians have still to be won over. Even in

Malaysia, which has the world's largest shariah bond market, HNW individuals have limited interest in Islamic assets.

"The appetite is still quite small because they continue to nibble," said CIMB Private Banking co-head Carolyn Leng. "Offerings of Islamic products are not that great here, what you have is probably what the market (outside) has as well. Product innovation is key, we need to be a lot more creative."

Structured products and Islamic bonds are the main shariah products that wealthy Malaysians put their money into, Ms Leng said.

Middle East investors have a wider choice of Islamic offerings as banks tap their global resources to structure innovative products, Ms Leng said. "There are a lot of derivatives-based kind of products. The way they structure some options into their products is interesting because it's done in such a way that it's a profit-sharing method."

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