FINANCE - Use sovereign funds to invest in syariah-compliant products: Regent Read more: Use sovereign funds to invest in syariah-compliant products: Regent (Malaysia)

MUSLIM countries should allocate a fraction of their sovereign funds to financial institutions which have the expertise to invest in syariah-compliant investment funds and instruments.

Perak Regent Raja Dr Nazrin Shah said one of the driving forces for Islamic finance to prosper is for large investment organisations such as sovereign wealth funds of Muslim countries to take a developmental view when determining their asset allocations.

"It is understandable that yields and returns are the main focus. But it is important for these institutions to also pave the way for Islamic finance to reach the next level.

For example, a certain fraction of the funds could be allocated to those financial institutions which are syariah-compliant," Nazrin said in his keynote address at the second Global Islamic Finance Forum in Kuala Lumpur yesterday.


He added this would enable a greater number of participants to be sustained and Islamic finance to be broa-dened.

On another note, Nazrin said Islamic financial products should also be able to cater to end-to-end financing requirements of consumers and businesses.

Initiatives such as the commodity trading paltform Bursa Suq Al-Sila can be utilised to facilitate liquidity management of Islamic financial instituions.

Saudi Arabia's Al Rajhi Bank and Cagamas Bhd also collaborated to issue an innovative sukuk which aims to meet the syariah demands of investors in the Middle East as well as in Asia.

Read more:  http://www.btimes.com.my/Current_News/BTIMES/articles/jif2/Article/#ixzz13VUweHjS - Oct 26, 2010