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Malaysia Welcomes Mid-East Investments In Islamic Finance

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Points of Essence:

  • The MIFC takes advantage of the perceived stronger position of Islamic finance, in light of the current global credit crisis, to welcome investments from the Middle East. This is in line with position Malaysia as an international Islamic financial hub.

By: Ramjit

KUWAIT CITY, Oct 23 (Bernama) — Malaysia continues to welcome the presence of Middle Eastern financial institutions and investors in Islamic finance as there is a tremendous upside potential, the Raja Muda of Perak, Raja Dr Nazrin Shah said.

He said the current financial turmoil provided an opportunity for Islamic finance to position itself as a complement, if not alternative, to conventional finance by providing investors with other asset classes and markets that provided stability.

“The syariah injunctions that prohibit excessive leverage and speculative financial activities have limited the exposure of Islamic funds to the meltdown of the financial system in the US and Europe.

“It therefore comes as no surprise that during the current global financial turmoil, Islamic funds have seen less volatility and risk, and as a result have performed better compared to conventional funds,” he said.

He said this in his speech at a luncheon talk with investors in conjunction with the Malaysia International Islamic Financial Centre (MIFC) roadshow to Kuwait and Saudi Arabia here today.

Raja Nazrin said over the last five years, there has been increasing interest among Middle Eastern investors in the Asian market, with Kuwaiti Islamic financial institutions having already made their presence felt in Malaysia.

Among these are Kuwait Finance House, he said.

To date, some of the more prominent investments in Malaysia included the US$600 million (US$1=RM3.53) Baitak property investment fund, the Pavillion complex in Kuala Lumpur, a joint-venture property development project with Sunway City to build Sunway South Quay, and investments in the Iskandar Malaysia Region amounting to US$1.2 billion.

“We in Malaysia welcome financial institutions and investors to take advantage of the numerous opportunities offered under the MIFC initiatives,” he said.

Raja Nazrin noted that Malaysia was centrally located in the Asean region which comprises a potential market of about 570 million people and a combined growth domestic product of more than US$1 trillion.

Malaysia, he added, was also well-positioned to provide the linkages to support investment flows in the region, and the MIFC could provide the gateway for investors to seek investment opportunities in the Asean, one of the fastest growing regions in the world.

The MIFC was launched in 2006 as part of Malaysia’s initiative to globally integrate within the international Islamic financial community, and to position the country as an international Islamic financial centre.

Since then, significant progress has been made as the Islamic financial system in Malaysia today comprises the Islamic banking institutions, the takaful (insurance) and re-takaful industry, and the Islamic money and capital markets.

Raja Nazrin said significant progress has been achieved, in particular, in positioning Malaysia as a centre for the origination, distribution and trading of Islamic bonds or sukuk.

“The Malaysian sukuk market has now evolved into the world’s largest Islamic bond market, accounting for about 60 percent of the global sukuk outstanding.

“Malaysia is also becoming a centre for Islamic fund and wealth management services and for international Islamic banking business, as well as a centre for Islamic finance education, training, consultancy and research,” he said.



Written by Suapi Shaffaii

October 23, 2008 at 11:42 pm

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