31- Brief Development on Islamic Finance in Malaysia

This brief update was extracted from the Economic Report (Star Special, Saturday 8 October 2011) and Bloomberg (7 October 2011)


July 1, 2011

The Shariah Governance Framework was implemented to further strengthen the oversight role, authority, accountability, independence and competency of the Board of Directors, the Shariah Committee and the Management of the Islamic Financial Institutions on Shariah matters.

First half of 2011

Two Islamic indexes were launched namely:

a) the Bloomberg Malaysian Foreign Currency Sukuk Index (a non-Ringgit denomination index developed to provide global benchmark for the performance of Sukuk and the avability to track movement of foreign currency); and

b) Bloomberg-AIBIM-Bursa Malaysia Sovereign Shariah Index - collaboration between Bloomberg.

End of July 2011

# 847 Shariah compliant securities were hosted on Bursa Malaysia, representing 89% of the total listed securities with a market capitalisation of RM826 billion or 61.7% of total market capitalisation (end 2010: RM756.1 billion or 59.3%);

# Malaysia remained a leader in global sukuk market outstanding and Bursa Malaysia is also the top sukuk listing destination, with 19 sukuk totalling RM88.3 billion (USD29.6 billion);

# Fully fledged Islamic fund management companies is 16 and 160 unit trust funds with total net asset value RM26.4 billion (end 2010 : 152 funds:RM24 bil)

# Islamic wholesale funds launched stood at 24 (end 2010: 19 funds) with size in terms of net asset value (NAV) of RM7 billion (end 2010: RM4.2 Billion);

# One (1) Islamic exchange traded fund is listed with NAV of RM579 million and Islamic real estate investment funds (REITs) stood at 3 with market capitalisation of RM2.5 billion as end of June 2011;

# Asset of Takaful industry grew 16.8% to RM16.3 billion, accounting to 8.7% of total assets in the insurance and takaful sectors. Market penetration rate of family takaful improved to 12.1% (end 2010: 10.9%). For General takaful sector, gross direct contribution increased 18.1% to RM917.5 million (Jan-July 2010: 27.6% or RM776,7 mill, due to higher contribution from motor and medical business

# Malaysia's Islamic banking assets rose 15 percent to RM389.3 billion, strengthening the country's position as the global hub of Shariah compliant financing. Based on total banking system. Financing asset increased to 17 percent (RM246.8 billion) and make up 23 percent of total loans and financing, while deposits grew 14 percent to RM299.1 billion;

# Islamic insurance, or takaful, assets rose 17 percent to 16.3 billion ringgit at the end of July from the same period last year, according to the report. The sector accounted for 8.7 percent of Malaysia’s total insurance industry as of July 31, up from 8.3 percent a year earlier.

 
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