Malaysia calls for Kingdom’s help to foster Islamic finance

By Shahid Ali Khan

RIYADH - Saudi Arabia can be a strategy partner of Malaysia to promote international Islamic finance industry, said a high-ranking official of Malaysia bank currently visiting the Kingdom.
Mohamed Razif Abd Kadir, deputy governor, Bank Negara Malaysia said at a press conference Saturday that the dynamic nature of economic ties and historical relations between the two countries, Saudi Arabia could be a strategic partner for Malaysia in shaping the global Islamic finance industry.
A 50-member delegation led by Raja Dr. Nazrin Shah, financial ambassador of Malaysia International Islamic Financial Center (MIFC) is currently visiting Saudi Arabia.
MIFC is an initiative to promote Malaysia as an Islamic financial hub by global integration of economic linkages among organizations related with Islamic finance.
The MIFC delegation is comprised of representatives from Malaysia’s regulatory authorities, national investment agencies, Islamic banks, Islamic fund managers, Takaful operators and professions services firms and Shariah research institute.
The delegation is organizing road shows in Riyadh, Jeddah and Makkah seeking to establish contacts with Saudi businessmen and investors.
Kadir said about 60 percent of Sukuk in the world’s financial market originate from Malaysia. “In fact, Malaysia has a 60 percent of the Sukuk world’s market share,” he said.
Sukuk, a “legal instrument, deed, check” is the Arabic name for a financial certificate, but commonly refers to the Islamic equivalent of bond.
Kadir said during the visit MIFC members will hold talks with officials of Capital Market Authority (CMA) and Saudi Arabian Monetary Agency (SAMA). “We will explore possibilities of establishing close links that can shape the global Islamic finance industry,” he said.
He said the countries in Asean Free Trade Area (AFTA) alone comprised of a population of 500 million people that offers huge potential for Islamic finance. The awareness among the people in Asean-member countries namely Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam, Laos and Myanmar is increasing remarkably, he said.
“Saudis can join hands with Malaysia and other players in the region to tap this huge potential for Islamic finance,” he said.
Nik Mohamed Din Nik Musa of MIFC Promotions Unit said the level of interest for Islamic finance is rising among Saudis. He said more number of Saudi businessmen and investors started looking for Shariah compliant projects.
“During our current visit we want to establish contacts with more number of Saudi businessmen before entering into transaction dealings,” he said.
Dr. Nazrin Shah, MIFC Finance Ambassador said there has been a 30 percent growth in the corporate Sukuk that rose to SR32 billion in 2009 from SR24 billion in 2008.
“The annual compound rate of growth in Sukuk issues is 21 percent since 2001,” she said. - SG