Vibrant global Islamic finance hub
The international financial community regards Malaysia as one of the world's leading Islamic financial centers.
The Malaysian government and industry players alike make concerted efforts to enhance this position and continue the development and nurturing of Islamic banking and finance.
The reasons why Malaysia has become the pioneer in global Islamic banking and finance include the following:
Issuance of the world's first global sovereign sukuk: $600 million Malaysian Global Sukuk in 2002;
Issuance of the world's first global corporate Islamic bond, sukuk Ijarah, worth $150 million in 2001 by Kumpulan Guthrie Berhad;
Issuance of the world's first Shariah compliant exchangeable bond worth $750 million by Khazanah Nasional Berhad;
Malaysia ranks first in terms of sukuk issuance (67 percent of global outstanding sukuk).
In addition, the country possesses a comprehensive financial as well as a comprehensive Islamic financial landscape, progressive institutional infrastructure and product development, diversity of players, new licenses to carry out international currency business, wide range of products for retail and institutional customers using various contracts under Shariah, as well as an effective legal and regulatory framework.
Islamic finance in Malaysia has successfully integrated key structural components comprising the Islamic banking industry, the takaful industry, and the Islamic money and capital markets.
To further strengthen Malaysia's position as an international Islamic financial center, its government has recognized the need to create a more vibrant, innovative and competitive international Islamic financial services industry in the country.
On August 14, 2006, the Malaysian government launched an initiative known as the Malaysia International Islamic Financial Center or MIFC, which comprises a diversified range of financial institutions operating from anywhere in Malaysia and offering Islamic financial products and services in any currency to non-residents and residents.
The MIFC initiative will be supported by high-caliber human capital, a world-class financial infrastructure and practices that meet the best international standards.
Malaysia offers a conducive operating environment with the latest liberalization and measures taken under the MIFC to promote Malaysia as preferred Islamic financial hub.
It also offers a series of tailored incentives for financial institutions, fund managers or Islamic stock broking companies, investors and issues.
The measures and initiatives will further enrich and integrate the Malaysian market with the global Islamic financial system and promote cross-border transactions.
(China Daily 08/31/2007 page22)
