Thursday June 28, 2012

Overseas expansion key in future Islamic capital market

KUALA LUMPUR: The next phase of growth of the Islamic capital market would be characterised by greater internationalisation, which would see more product as well as service providers expanding beyond their home market

The Securities Commission’s executive director of Islamic capital market Zainal Izlan Zainal Abidin said more investors would seek products or instruments with international exposure.

Speaking at the 7th Islamic Markets Programme yesterday, he said there would also be greater diversity in terms of currencies used in issuing syariah-compliant instruments.

Izlan said the Islamic finance industry was at a crucial stage where it needed to redefine and establish the enabling environment that would spur its next phase of growth. Islamic finance, he said, had developed into an industry with global appeal, marked by a 15% average annual growth rate over the past decade, to reach US$1.3 trillion today.

As for Malaysia’s Islamic capital market, the Capital Market Masterplan 2 is expected to grow at an average rate of 10.6% annually, over the 10-year period to 2020.

Izlan said Islamic finance had developed not only in traditional Muslim markets like Malaysia and the Middle East, but also in conventional markets and financial centres such as the United Kingdom, with a growing number of jurisdictions across the globe at various stages of developing their capabilities in Islamic finance.

Themed “Building the Environment for the Growth of Islamic Finance,” the IMP attracted 41 local and international participants including Islamic finance practitioners, members of academia and regulators.

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