Moody’s: M'sia accounts for over 60% of global sukuk, country's policy supports Islamic finance growth

by **Cals** Fri 23 May 2014, 00:12

Business & Markets 2014

Written by Jonathan Gan of theedgemalaysia.com

Thursday, 22 May 2014 11:35

KUALA LUMPUR (May 22): Malaysia currently accounts for more than 60% of outstanding sukuk globally, according to Moody’s Investors Service.

In a statement today, Moody's Islamic finance specialist Simon Chen said the country's policies had supported the growth of its Islamic finance industry.

"Malaysia's robust governance framework has supported the growth of its Islamic finance industry, facilitated product innovation and sukuk issuances by the Malaysian government, financial institutions as well as corporations from varied industry sectors," Chen said.

Chen offered his thoughts on Islamic finance in conjunction with Moody’s recently-formed global Islamic finance group (IFG) to meet growing demand for Islamic-finance credit ratings and research.

The IFG will be chaired by Khalid Howladar, who was recently appointed as Moody's global head of Islamic finance.

Khalid also commented on Malaysia’s natural affinity with customers in the emerging markets.

“Given the natural affinity of customers within the Gulf and Malaysia towards Islamic banking, growth of these banking assets in emerging markets is broadly twice that of conventional banks,” he said.

Khalid said the sukuk market was rapidly growing at around 35% a year and continued to tap various markets beyond the traditional centres of Islamic finance.

“The sukuk market in particular ... is growing rapidly, averaging around 35% a year, with an increasing number of non-Islamic sovereigns, corporates and banks seeking to tap the expanding pool of Islamic liquidity.

“Countries beyond the traditional centres of Islamic finance, notably, the UK and Luxembourg as well as many others across Europe and Africa, are also beginning to utilise Islamic finance in order to both raise additional capital and claim a share of the related financial services growth,” said Khalid.

Chen and Howladar will be representing Moody’s at the upcoming Islamic Finance News Asia Forum here (Kuala Lumpur) this Monday and Tuesday (May 26 and 27) and World Islamic Banking Conference Asia Summit in Singapore on June 3 and 4.