KUALA LUMPUR: The outlook of the Islamic finance industry, particularly the Islamic capital market, remains positive in view of development at both the international and domestic levels, said the Securities Commission Malaysia (SC).
Its Development and Islamic Markets Business Group Managing Director, Zainal Izlan Zainal Abidin said some of these development were related to greater innovation and collaboration, which served to broaden and deepen the market.
“At the same time the number of participants - as issuers, investors or intermediaries - is also growing,” he said in his keynote address on the Global Islamic Capital Market Outlook at the 14th Islamic Finance Forum 2017 here, today.
Zainal Izlan said part of the growth potential of the Islamic capital market stemmed from its close alignment with sustainable or socially responsible finance.
“In this regard, opportunities for the Islamic capital market to capitalise on the similarities in the underlying principles between Islamic and sustainable investing are significant.
“Furthermore, there is already international recognition of such similarities as Islamic funds are considered part of the sustainable investment universe by the Global Sustainable Investment Alliance,” he said.
Citing the SC Global Sustainable Investment Review 2016 report, Zainal Izlan said it showed that Malaysia was the largest sustainable investment market in Asia (excluding Japan) with a 30 per cent share, on account of its Islamic funds.
“Malaysia is therefore well positioned to benefit from this fast growing market segment that has US$23 trillion in assets under management globally,” he said.
Currently, he said the size of the Malaysian capital market stood at RM3.1 trillion, comprising RM1.8 trillion in market capitalisation of equities and RM1.3 trillion of sukuk and bonds outstanding.
“For the first half of 2017, RM63.3 billion was raised in the Malaysian capital market, of which RM54.8 billion through the corporate sukuk and bond market, and RM8.5 billion through the primary and secondary equity markets,” he added.