Malaysia remains world leader in Islamic finance

Malaysia accounts for US$165.2 billion or 60% of worldwide sukuk deals. Sukuk is the Islamic equivalent of bonds.

HSBC Amanah (Malaysia) Berhad said the sukuk market was expected to grow to US$44 billion this year. For the first half of 2012, the sukuk market was worth US$20.5 billion, up from US$15 billion year-on-year.

Malaysia continues to lead in Islamic finance with Singapore striving to catch-up. Its leadership comes from its larger volume of Islamic investors looking for syariah-compliant investments like sukuk compared to Singapore.

The Malaysian government said fund-raising activities in the second quarter continued to be strong with the regulator, the Securities Commission (SC), receiving 56 applications for equity-related proposals and issuances of private debt securities, or three times the applications in the first quarter.

Malaysia’s sukuk market had US$165.2 billion in sukuk outstanding at the end of June, which is two-thirds of the total sukuk outstanding globally worth US$243.4 billion.

In 2011, corporate bond issuances in the Malaysian capital market amounted to US$23 billion. In the first half of 2012, total corporate bond issuances reached US$19 billion. Included in total is PLUS Berhad’s US$9.7 billion sukuk, the single largest corporate sukuk in the world, which will go to o finance the purchase of five toll concessions, and for working capital and general funding requirements

Islamic banking assets with commercial banks globally will hit US$1.1 trillion in 2012, up a third from US$826 billion in 2010, said the 2011 Ernst & Young World Islamic Banking Competitiveness Report.