KUALA LUMPUR: Malaysia took the lead as the largest sukuk market globally in 2020, with most of the issuances tied to the principles of Sustainable and Responsible Investments (SRIs), Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz (pix) said.
Citing a report by the Malaysia International Islamic Finance Centre (MIFC), he said Malaysia accounted for more than 45% of the world’s outstanding amount or approximately US$258 billion.
“The country has seen more sukuk issuances that are tied to the principles of Sustainable and Responsible Investments.
“From funding renewable energy infrastructures such as solar and hydro, to supporting social purposes, such as micro financing and education, Malaysian sukuk issuers have acquired an appetite for such ventures, reflecting an increasingly strong commitment towards a sustainable future through Islamic financing products,” he said in special address at the 16th Kuala Lumpur Islamic Finance Forum (KLIFF) held virtually on Tuesday.
Tengku Zafrul said data from the stock market and fund management industry also proved that Islamic finance has shown unrelenting resiliency and has continued to attract investors during these uncertain times.
“This has resulted in more demand for shariah-based investments, with total Islamic assets under management growing from 22% of overall assets in 2017 to 24% by end of 2020 with a total value of RM217 billion,” he added.
In another development, Tengku Zafrul said Malaysia will develop an Islamic Finance Hub 2.0 under Shared Prosperity Vision 2030 (SPV 2030).
Under its 15 Key Economic Growth Activities (KEGA), he said, Malaysia is well positioned to lead globally in this sector. “Other initiatives to push for shared prosperity include the collaboration between the public and private sector in utilising Waq’f (endowment) structures for social purposes,” he said.
He added that SPV2030 also highlights Malaysia’s potential and plans in tapping the US$3 trillion halal market.
“Malaysia’s firm commitment in promoting the halal industry can be seen in our RM14 billion investments to develop halal parks, where halal-oriented businesses will benefit from infrastructure, support services, and tax incentives.
“This will not only drive Malaysia’s ambitions to be a global halal hub, but will also help the world become more resilient post-Covid-19 pandemic, guided by the Islamic economy’s core principles of socio-economic and environmental sustainability, as well as social equity, fair trade and ethical consumerism,” he added.
Tengku Zafrul said the ministry will be focusing on six priorities this year and hopes the Islamic finance industry will show its full support on focus areas such as creating jobs, digitalisation, empowering small and medium enterprises, as well as accelerating the implementation of specific projects to drive economic recovery. – Bernama