Securities Commission Chairman, Datuk Syed Zaid Albar during Nomura Islamic Asset Management Malaysia (NIAM) 10th anniversary Conference. NSTP/ HAFIZ SOHAIMI

KUALA LUMPUR: The Islamic capital market was valued at RM1.88 trillion, or 61 per cent of Malaysia’s overall capital market as at end-2018, said Securities Commission (SC) chairman Datuk Syed Zaid Albar.

It is a slight contraction from last year’s RM1.9 trillion.

Zaid said the current size of the domestic Islamic capital market was supported by a vibrant industry comprising local and foreign fund management companies, stockbrokers and advisors with comprehensive Islamic capital market capabilities.

“On the global scale and despite heightened competition, Malaysia continues to be a leader in the Islamic capital market, with sukuk and Islamic fund markets which are among the largest in the world.

"Industry-led innovation in tandem with SC’s developmental initiatives also resulted in a diverse range of Islamic investment products including unit trust funds, wholesale funds, private retirement schemes, ETFs (exchange-traded fund) and REITs (real estate investment trusts).

“Such an achievement was decades in the making, and rooted in Malaysia’s holistic approach towards developing an Islamic capital market ecosystem,” he said during his address at Nomura Islamic Asset Management 10th Anniversary Investment Forum, here, today.

Zaid said the SC, recognises the Islamic fund management industry as an important channel for mobilising capital into shariah-based investments, and the industry landscape has changed significantly over the past decade.

"Consider, for example, that in 2008 there were only five Islamic fund management companies and 30 fund management companies with Islamic windows.

"Today, the numbers have grown to 22 Islamic fund management companies with a further 31 fund management companies operating through Islamic windows, with assets under management of RM158.8 billion,” he said.

Moving ahead, Zaid said digitisation and demographic changes will continue to reshape markets, and it is critical for market participants to adapt to opportunities and risks arising from there.

"A key driver of future industry growth is the shift in investment preferences an emergent generation of investors.

The millennials, in particular, are accounting for a growing share of the investor base, with studies identifying their greater awareness on SRI and their propensity to align investment decisions with social causes and personal values.

"Millennials also see businesses as agents for socioeconomic change, and the ability of our intermediaries to respond to this trend and cultivate this generation of socially-aware digital natives will enhance the value proposition and competitive advantage for Malaysia’s fund management industry,” he said.