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Saturday, 28 September 2013

Malaysia Remains Forerunner In Global Sukuk

KUALA LUMPUR, Sept 24 (Bernama) -- Malaysia remains a forerunner in global sukuk with the global outstanding sukuk amounting to over US$148 billion (RM474 billion) as at June 2013, which represents 60.4 per cent of the total global sukuk.

Deputy Prime Minister Tan Sri Muhyiddin Yassin (pix) said the number reflected Malaysia's rapid growth in sukuk compared with its number of only US$1.5 billion (RM5 billion) of global sukuk in 2001.

"Being a conducive environment for sukuk transactions, I certainly believe that Malaysia has what it takes to attract more institutions from all regions of the global aiming to tap Malaysia's Islamic finance marketplace and the pool of liquidity," he said at the opening of the 10th Kuala Lumpur Islamic Finance Forum (KLIFF 2013) in the capital, Tuesday.

He said credit must be given to Bank Negara Malaysia, the Securities Commission Malaysia, Shariah scholars and the Islamic financial industry community for their efforts to bring Malaysia's Islamic finance marketplace to the current level of sophistication.

He said this was in line with the vision for a comprehensive and progressive Islamic finance marketplace, which has grown from strength to strength for over 30 years.

Muhyiddin said as Malaysia continued to grow its Islamic finance industry, there was a need to revisit and review any particular areas of divergence in order to come up with a better and more acceptable solution.

"Integrity, credibility and competency are the key success factors in developing the Shariah framework and governance. Albeit divergences of Shariah rulings, there should not be a major issue so long as they are backed by sound arguments and recognised legal methodologies," he said.

Muhyiddin, who is also Education Minister, also pointed out that shortage of qualified experts in Islamic finance was the constraining factor for the innovation of new products and services in most countries.

"Therefore, investment in developing the key resources of the industry must be further enhanced. Heightened market awareness of the huge potential that Islamic finance offers is also urgently needed, and this can be done through research, education and training," he said.

INCIEF, which produces high-calibre practitioners and professionals in Islamic finance as well as specialists and researchers in the disciplines of Islamic finance, has so far enrolled 2,224 students from 83 countries as at July 2013, he said.

Muhyiddin reminded Islamic banks to not be complacent and continuously strive to be the best banking system in order to attract the public, Muslims and non-Muslims alike.

"To remain relevant, Islamic banking must be robust and resilient and should continuously reposition itself if it desires the respect and recognition from the rest of the world," said the deputy minister.

KLIFF 2013, which is a two-day conference, saw about 400 delegates comprising industry players, policy makers as well as academics.

(National News Agency Of Malaysia / 24 Sept 2013)

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Malaysia: Waqf Is Missing Piece In Islamic Financial System, Says CIMB Islamic

KUALA LUMPUR, Sept 24 (Bernama) -- Waqf (Wakaf) is the missing piece in Malaysia's Islamic financial system despite the country being the market leader with various sophisticated products and services.

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)

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