SALMAN: Sukuk mart’s prospects ‘very encouraging’

By SUMATHI WONG
Malaysia is expected to further cement its leading position in the Islamic finance industry, particularly in the face of the present economic crisis, as it has laid a strong foundation after being one of the earliest entrants into the sector.
The long-term prospects for the sukuk market — being one of the core components of Islamic finance — remain "very encouraging", said Kuwait Finance House (M) Bhd managing director Datuk K Salman Younis.
He told a media roundtable discussion in conjunction with the celebration of the Dow Jones Islamic Market (DJIM) Indexes' 10th anniversary in Kuala Lumpur yesterday that the local Islamic finance industry is growing at a much faster pace as compared to 2005, when KFH first started its operations here.
This is due to the wealthy regulatory framework that has created great flexibility for players in the industry here. Salman said: "We see a great deal of potential in the asset management business, not only in Malaysia, but in the region."
According to him, in view of the global financial crisis, KFH will strive to capitalise on its regional presence and knowledge of the market by seeking opportunities to invest in assets at valuations not previously made available to general investors.
Meanwhile, Dow Jones Indexes Asia-Pacific and the Middle East sales senior director Sumeet Nihalani said, "The 10th anniversary of of the Dow Jones Islamic Market Indexes is an important milestone for Dow Jones Indexes, which pioneered the space of Islamic indexes and has been providing institutions with a tool to benchmark the performance of Shariah-compliant portfolios."
The DJIM Indexes serves as a benchmark for institutional investors for portfolio construction and performance comparison and is now utilised as a basis for many investment products.
It was launched in February 1999 as the first benchmark to measure the performance of Shariah-compliant investable equities. Since then, it has expanded to more than 100 indexes for all major establishes and emerging financial markets, regions and sectors.
These Islamic indexes are from the Asean, Brazil, Russia, India and China (BRIC) and Gulf Cooperation Council (GCC) regions, as well as for global and Malaysian blue-chips.
In a statement, Dow Jones Indexes president, Michael A Petronella said that the company has continuously expanded the DJIM index series and is also the first in sukuk indexing and combining Islamic with sustainability criteria in the DJIM Sustainability Index.

(This story appeared in The Malaysian Reserve on Mar 19, 2009. The Malaysian Reserve is a daily business/finance newspaper published out of Kuala Lumpur, with a sectoral page on Islamic finance on Mondays, edited by Habhajan Singh)