Malaysia: Asia offers big opportunities for Islamic finance, says SC

KUALA LUMPUR: The Asian economic landscape offers ample opportunities for Islamic finance to flourish, given the region’s favourable economic outlook and growing middle class affluence.

Securities Commission Malaysia (SC) chairman Datuk Ranjit Ajit Singh said infrastructure investment is an important component of economic development.

“The Asian Development Bank has projected that Asean nations would require an average of about US$60bil in infrastructure investment annually between 2010 and 2020.

“This substantial amount provides tremendous potential for financing and capital raising through the issuance of sukuk, as many infrastructure assets are inherently syariah-compliant.

“Furthermore, sukuk will naturally capture a wider subscriber base as they appeal to both conventional and syariah-based investors,” he said in his keynote address at the World Islamic Banking Conference: Asia Summit 2013 in Singapore yesterday.

The text of his speech was released by the SC here.

Ranjit pointed out that the growing affluence of the Asian middle class will also generate increasing demand for investment and savings products, thus, the opportunity for Islamic investments to meet this prospectively strong demand should not be underestimated.

The global sukuk market has registered a total issuance size of US$131.2bil globally in 2012, a 54% increase over 2011.

This year is developing to be another promising one with a total issuance size of US$31.7bil globally in the first quarter.

According to the Ernst & Young World Islamic Banking Competitiveness Report 2013, global Islamic banking assets held by commercial banks amounted to US$1.3 trillion as of 2011.

The top three countries with the largest Islamic banking industry are Saudi Arabia, with an estimated US$207bil of Islamic assets, followed by Malaysia with total assets of US$106bil and the United Arab Emirates at US$75bil.

“This growth momentum is expected to be sustained as global Islamic banking assets are forecast to cross US$1.8 trillion by end-2013,” Ranjit said. 

(The Star Online / 05 June 2013)

---
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com