He said this was due to the prevailing global economic downturn but added that long-term recovery was certain.
“We believe asset growth of Islamic funds will be back to its strong level once the global economy improves,” he said at the Dow Jones Islamic Market Indexes media briefing yesterday.
Salman said there was huge potential for Malaysia to be the leading Islamic financial hub in the region and for Islamic financing to be the country’s key pillar of growth.
According to The Banker, a global financing intelligence magazine, the top 500 Islamic financial institutions charted a 27.6% asset growth to US$639.1bil in 2008 compared with US$500.1bil the previous year.
The major contributors to asset growth for Islamic funds are Gulf Cooperation Council (GCC) countries (US$262.7bil); Asia (US$67.1bil), led by Malaysia; Australia/Europe/the United States (US$35.3bil); and non-GCC Middle East countries, Middle East and North Africa (US$248.3bil).
PricewaterhouseCoopers Taxation Services Sdn Bhd senior executive director (Islamic financial services practice) Jennifer Chang concurred with Salman’s view on Malaysia’s potential as the region’s Islamic financial hub.
For instance, she said, Malaysia’s takaful industry had doubled in asset size over the last five years and its penetration rate was expected to reach 20% by 2010, compared with 6.5% currently.
She added that Malaysia was the largest player with 20% share of the global takaful business worth US$4bil.
Chang also said that as at end-November 2008, there were 149 Islamic funds domicled and managed in Malaysia, compared with 131 in Saudi Arabia.
“This is despite Malaysia’s total Islamic assets under management being only US$4.64bil, compared with Saudi Arabia at US$13.9bil for the period under review,” she said.
As at April 2008, the total Islamic assets under management worldwide is believed to be US$33.9bil.
--The Star Online