The Securities Commission Malaysia (SC) is bullish on the growth of the Islamic fund management ecosystem, with Malaysia ranked among the top three in the world.
While latest statistics show Malaysia having assets under management (AuM) valued at US$32 billion, this figure is expected to grow as the global AuM is forecast to rise from US$167 billion currently to US$200 billion by 2027, said SC Islamic Capital Market Development Executive Director Sharifatul Hanizah Said Ali.
Malaysia’s Islamic AuM is currently ranked third globally, said Sharifatul, stating this sector includes many types of shariah-compliant funds, consisting of private mandates and collective investment schemes including listed like REITs and ETFs, and unlisted investment products like unit trust fund, wholesale funds and private retirement schemes.
Speaking at the inaugural IFN Investor Asia Forum 2024 at the SC’s premises, Sharifatul noted that “Halal investment” are among Google Trend word searches which have been gaining traction – reflecting a growing awareness of Islamic finance’s multifaceted nature and propositions beyond Sukuk.
As an asset class, Sharifatul cited industry forecasts of total Sukuk volume hitting US$1.3 trillion, representing an increase of over 70% within a five-year period, and that overall Islamic finance value globally is expected to hit US$6.7 trillion by 2027.
Within Malaysia, the Islamic capital market valuation reached RM2.6 trillion (US$630 billion) as of July 2024, growing 10% year-on-year from July last year. “Malaysia also continues to lead the Sukuk market globally, contributing more than one-third of the market share.”
The SC’s statistics show Malaysia’s Sukuk market stood at RM1.3 trillion (US$315 billion) in July 2024, with over RM28 billion (US$6.78 billion) recognized as sustainable and responsible investment Sukuk – with the energy and utilities sectors making up close to 46% of that value, followed by transportation and real estate sectors, said Sharifatul.
Other key Islamic capital developments include Malaysia’s venture capital and private equity market sector in 2023 having RM17.9 billion (US$4.33 billion) in committed funds, spanning both Shariah and non-Shariah investments.
Alternative financing in Malaysia has 12 equity crowdfunding players and 13 P2P platforms offering Islamic solutions. In 2023, Islamic funds raised through these platforms grew more than four times in value to RM524.8 billion (US$126.99 billion) in 2023, said Sharifatul.
