Internationalisation to Drive Islamic Capital Markets

It has been reported that the next phase of growth of the Islamic capital market would be characterised by greater internationalisation, which would see more product issuers and service providers expanding beyond their home market. The Securities Commission's executive director of Islamic capital market, Zainal Izlan Zainal Abidin said that more investors would seek products or instruments with international exposure. Speaking at the 7th Islamic Markets Programme, he said there would also be greater diversity in terms of currencies used in issuing Shariah-compliant instruments. Izlan said the Islamic finance industry was at a crucial stage where it needed to redefine and establish the enabling environment that will spur its next phase of growth. Islamic finance, he said, had developed into an industry with global appeal, marked by a 15% average annual growth rate over the past decade, to reach US$1.3 trillion to date. As for Malaysia's Islamic capital market, the Capital Market Masterplan 2 was expected to grow at an average rate of 10.6% per annum, over the 10-year period to 2020. Izlan said Islamic finance had developed not only in traditional Muslim markets like Malaysia and the Middle East, but also in conventional markets and financial centres such as the UK, with a growing number of jurisdictions across the globe at various stages of developing their capabilities in Islamic finance. Themed "Building the Environment for the Growth of Islamic Finance", the IMP attracted 41 local and international participants including Islamic finance practitioners, members of academia and regulators.