Malaysia pushes Islamic finance for Gulf investors

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Islamic investorsNew Malaysian standards for Shariah-compliant equities are expected to attract more Islamic investment funds from the Gulf region, said a senior official of the country’s Securities Commission (SC). A revised list of Malaysian equities that qualify for Islamic investment, compiled by the SC, took effect on November 29.

It uses a new screening methodology that incorporates quantitative filters such as benchmarks for financial ratios, moving closer to the approach generally used in the Gulf. The change will help to internationalise Malaysia’s Islamic finance industry, said Zainal Izlan Zainal Abidin, SC’s executive director of Islamic Capital Markets, according to a Reuters report.

“The attraction of Malaysian Islamic funds and equities to other Gulf states, as a proxy for the growing economic importance of Asean, is expected to be accelerated,” he said.

The SC’s methodology had previously included only qualitative screens; for example, it banned companies involved in sectors such as tobacco and alcohol.

Islamic fund managers in Malaysia have six months to dispose of securities that are excluded from the list, which now has a total of 653 Shariah-compliant stocks out of 914 listed on the Bursa Malaysia. The new list adds 16 stocks and removes 158 that are on the previous list, which was issued in May.

Malaysia has the largest base of Islamic mutual funds, with 210 retail and wholesale funds that had RM79.6 billion in assets under management as of December 2012. These could increasingly be marketed in the Gulf through an existing agreement between the SC and the Dubai Financial Services Authority, said Zainal Izlan.

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Reading Time: 1 minute

New Malaysian standards for Shariah-compliant equities are expected to attract more Islamic investment funds from the Gulf region, said a senior official of the country’s Securities Commission (SC). A revised list of Malaysian equities that qualify for Islamic investment, compiled by the SC, took effect on November 29.

Reading Time: 1 minute

Islamic investorsNew Malaysian standards for Shariah-compliant equities are expected to attract more Islamic investment funds from the Gulf region, said a senior official of the country’s Securities Commission (SC). A revised list of Malaysian equities that qualify for Islamic investment, compiled by the SC, took effect on November 29.

It uses a new screening methodology that incorporates quantitative filters such as benchmarks for financial ratios, moving closer to the approach generally used in the Gulf. The change will help to internationalise Malaysia’s Islamic finance industry, said Zainal Izlan Zainal Abidin, SC’s executive director of Islamic Capital Markets, according to a Reuters report.

“The attraction of Malaysian Islamic funds and equities to other Gulf states, as a proxy for the growing economic importance of Asean, is expected to be accelerated,” he said.

The SC’s methodology had previously included only qualitative screens; for example, it banned companies involved in sectors such as tobacco and alcohol.

Islamic fund managers in Malaysia have six months to dispose of securities that are excluded from the list, which now has a total of 653 Shariah-compliant stocks out of 914 listed on the Bursa Malaysia. The new list adds 16 stocks and removes 158 that are on the previous list, which was issued in May.

Malaysia has the largest base of Islamic mutual funds, with 210 retail and wholesale funds that had RM79.6 billion in assets under management as of December 2012. These could increasingly be marketed in the Gulf through an existing agreement between the SC and the Dubai Financial Services Authority, said Zainal Izlan.

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