Malaysia: Islamic finance a viable complement in global financial system
KUALA LUMPUR: Policymakers should consider Islamic finance as a viable complement or reinforcement to the still fragile global financial system, the Sultan of Perak, Sultan Nazrin Shah said.
He said the principles and values in the syariah-compliant Islamic finance are universally desirable and should therefore be acceptable.
“However, we must also recognise that strong commitment and coordination among the policymakers and other relevant stakeholders are required for this approach to achieve a positive outcome.
“I look forward to even more developments in relationship building between parties in the United Kingdom and Malaysia in the coming years,” he said in his address at the 6th Securities Commission-Oxford Centre for Islamic finance (SC-OCIS) dinner in London Friday.
The text of his speech was made available to Bernama.
The dinner was held in conjunction with the 6th SC-OCIS Roundtable on Islamic Finance.
Sultan Nazrin Shah, who is also Royal Patron for Malaysia’s Islamic Finance Initiative, welcomed closer collaboration in various areas of Islamic finance between the two countries to create greater business opportunities, strengthen industry skill sets and enhance industry profiling.
As a global financial centre, he said London could create a wider acceptance and adoption of Islamic finance, which would later on contribute significantly towards the vibrancy and reach of Islamic finance, not only in the country but also globally.
He said the Battersea Power Station development, one of the Malaysian-owned projects based in the UK, has secured a Syariah-compliant syndicated financing of 467 million pound, one of the largest Islamic finance transactions ever conducted in the British market.
“In my view, the defining event in the development of Islamic finance globally was the maiden issuance last year by the United Kingdom government of 200 million pound sovereign sukuk.
“The issuance underscores London’s ability, as an international financial centre, to successfully market a product that hitherto has only been offered by Muslim countries.
“It also reaffirms the United Kingdom government’s commitment in developing Islamic finance, and its ability to play a leadership role in this regard,” he said.
He said the sovereign issuance by the UK was followed in quick succession by other non-Muslim countries, namely Hong Kong, South Africa and Luxembourg.
According to rating agency Moody’s, the US$2 trillion sukuk market is set to grow to US$4 trillion by 2020, growing annually at 15 to 20 per cent.