thailand-business-news.com - Malaysia’s Islamic finance sector is further consolidating its
position as a market leader, moving to broaden its product range and
expand its reach, though it may need to keep an eye on rivals aspiring
to emulate its success.
At a recent seminar on Islamic finance held in Istanbul, Mehmet
Asutay, the director of the Durham Centre for Islamic Economics and
Finance at UK-based Durham University, said Malaysia was positioning
itself to capture 25% of the market share in the Islamic banking and
finance sectors by 2012. (source)
“Islamic banking and finance has experienced substantial and
unprecedented growth in recent years, growing at a rate of 10-15%
annually,” Asutay said on September 19, adding that Malaysia was looking
to take a major share of the international market.
Malaysia’s place at the centre of the international Islamic finance
sector was given further recognition in early September when one of
Japan’s leading banks announced it was planning to make Malaysia its
global base for Islamic finance as soon as it receives approval from
industry regulator Bank Negara Malaysia (BNM).
On September 5, Mizuho Corporate Bank (MHCB), Japan’s third-largest
lender, began commercial operations in Malaysia, having been granted a
licence by the BNM last June, but bank officials made it clear that
launching conventional banking was only a stepping stone to the ultimate
objective of breaking into the Islamic financial sector.
Keizo Ohashi, chairman of Mizuho Malaysia, said gaining BNM approval
to open an Islamic financial arm would serve as a bridge to the wider
sharia-compliant banking market in the region.
“We regard Malaysia as a critical part of our Asia-focused strategy
because it is a strategic hub and gateway to business development in
ASEAN with its strong infrastructure in Islamic finance,” Ohashi told
local media.
According to Zakariya Othman, head of Islamic ratings at local
ratings firm RAM, making the move into the Malaysia’s Islamic finance
sector is a smart move for overseas lenders.
“By having sharia-compliant financing operations in Malaysia, foreign
banks like Mizuho will find it easier to tap into the Islamic market,”
Othman said in an interview with the Bloomberg news agency on September
7. “Malaysia, with 17m Muslims, also has a ready market and attractive
incentives.”
As well as attracting investment and building on its reputation as a
centre for Islamic finance, Malaysia is also branching out into
neighbouring markets. In mid-September, Malaysia’s sovereign wealth fund
Khazanah Nasional announced it was planning to issue a $78.3m sukuk or
Islamic bond. Volatile market conditions subsequently prompted Khazanah
to postpone the issue, but the prospect attracted significant attention
while it was on the table.
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