CIMB Islamic Bank Chief Executive Officer Badlisyah Abd Ghani said: "Malaysia has from the simplest saving products to sukuk as well as many different sophisticated products for institutional investors, corporate clients, small medium entrepreneurs and individuals.
"(But) what is missing in the market today is waqf in a commercial manner," he told reporters on the sidelines of the 10th Kuala Lumpur Islamic Finance Forum (KLIFF 2013) here today.
Waqf is an Islamic endowment of property to be held in trust for religious or charitable purposes.
Badlisyah said to have waqf in the financial market, there is a need for a conducive legal framework that will allow for its incorporation in an effective manner.
"If we have it, over time, waqf could be the bigger component of the Islamic financial market, as what was in the golden era of Islamic civilisation in the past," he added.
Badlisyah said in order to have that legal framework, there is a need for dialogues between the federal and state governments as the laws concerning waqf are currently under the jurisdiction of the state Islamic religious councils.
In his opening speech, he said the current legal framework for waqf does not allow for the proliferation of waqf across all areas of economy.
In the afternoon session, Badlisyah called on the government to provide incentives in the upcoming Budget 2014 to encourage industry players to list sukuk on Bursa Malaysia, a move which would further enhance the sukuk market.
"Of course, this need to be reviewed and studied by Bursa Malaysia and Securities Commission in terms of its viability but at the end of the day, it does create a good communication to the rest of the world that the market in Malaysia is significant because it is in the public domain," he said.
Badlisyah said, for example, on the London Stock Exchange, they have a few billion dollars worth of sukuk listed on the exchange and as a result, they claimed they are one of the largest sukuk markets in the world, despite some of these sukuk were issued outside London.
"It is the same in Malaysia. We already have the largest number of sukuk in the world, but it is just not listed and not in the public domain," he said.
With the listing of sukuk, overtime, it would encourage more trading of sukuk by individuals and the price discovery is also better as it is publicly available, resulting in a more vibrant sukuk market.
(National News Agency Of Malaysia / 24 Sept 2013)
Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com