Kuala Lumpur, 28 March 2018 – The BNP Paribas-INCEIF Centre for Islamic Asset and Wealth Management (CIAWM) in collaboration with INCEIF’s Research Management Centre, today held a conference at Sasana Kijang on the theme “Malaysia – The Potential Hub for Global Islamic Fund Administration.”
Datuk Zainal Izlan Zainal Abidin, Managing Director, Development & Islamic Markets of Securities Commission Malaysia delivered the keynote and launched the `Islamic Wealth Management: Theory and Practice’ book which was edited by Prof Shamsher Mohamad, Director of CIAWM at INCEIF, and Prof Mohamed Ariff, Head of Finance at Sunway University.
Today’s conference is timely against the background of the growing importance of the Islamic wealth management industry in Malaysia. The Malaysian Islamic capital market has seen rapid development in recent years, and grown at a much faster pace compared to the overall capital market. From 2001 to 2010, the stock market saw a compound annual growth rate of 11.1%, while bonds in the country experienced a compound annual growth rate of 10.8% over the same period. On another note, the Islamic capital market saw assets triple from RM293.7 billion (USD77.3 billion) to RM1.1 trillion (USD342.3 billion) over the ten year period. The Shariah fund assets experienced a growth from USD18 billion in 2012 to USD33 billion in 2017.
The global Islamic fund industry shrank for the second consecutive year in 2016, largely due to volatile market conditions. Malaysia – among the top domicile by Islamic fund assets – saw industry assets shrink from USD20 billion in 2015 to USD16.3 billion in 2016. Globally, Malaysia is second to Saudi Arabia in terms of Islamic asset under management with USD22.6 billion (32%) out of the total global value of USD70.8 billion. In terms of the number of Islamic funds, Malaysia is No 1 in the world with 388 funds out of the total 1,535 funds globally.
Malaysia hosts many international providers of financial support services. The country is actively engaged in leveraging on its competitive strengths to attract more international investment support service providers such as fund administration services to establish their operational base in Malaysia, providing services to asset owners and managers. This strategic vision to be a global hub for Islamic fund administration will bode well not only for Islamic funds but also ethical and global conventional funds in Malaysia.
In his welcoming remarks, Dato’ Prof Dr Azmi Omar, President & CEO of INCEIF, said a brief evaluation of the Malaysian position as a contender, in comparison to established global investment support service providers such as Luxembourg and Ireland, suggested a challenging but not an impossible task if the country were to focus on the Islamic fund and wealth management industry.
“Given its well-developed funds industry, comprehensive Islamic finance ecosystem and well-developed infrastructure, its reputation as a global hub for Islamic finance and the Government’s commitment to further develop and globalise this industry, Malaysia has a great potential in establishing itself as a leading international centre for Islamic fund and wealth management,” Dato’ Azmi added.