Islamic Finance Commendable Growth

A recent report by the Securities Commission Malaysia (SC) said the Islamic finance industry that is currently estimated to be worth about US$1 trillion (RM3.058 trillion) had made further headway in the Islamic traditional markets such as Malaysia and the Gulf Cooperation Council countries, while penetrating new markets such as in Europe and Africa.  Whilst traditionally, the Islamic banking assets account for a large part of this value, the segment that has enjoyed especially strong growth in the more recent years is sukuk.  As of May, the value of sukuk outstanding globally increased by 30% to slightly above US$140bil (RM428.1bil).  Malaysia, the biggest market for sukuk, has implemented a 10-year $444 billion development program to build power plants, roads and railways. Indonesia, home to the world’s largest Muslim population, plans to tap last year’s $2.5 billion budget surplus to fund construction projects.  According to Mr Zainal Izlan Zainal Abidin, executive director for Islamic capital markets at the Securities Commission, “Islamic finance has developed not only in traditional Muslim markets like Malaysia and the Middle East, but also in conventional markets,” .