MALAYSIA CAN STRENGTHEN POSITION IN ISLAMIC FINANCE, SAYS EXPERT

By Nor Baizura Basri

KUALA LUMPUR, Sept 27 (Bernama) -- Malaysia can strengthen its position as a
leader in global Islamic finance by exploring further important Islamic
principles, according to an industry expert.

Such principles can complement not only the product creations and innovation
but also support the Islamic finance foundation, said Dr Armen V. Papazian,
currently a fellow at the University of Cambridge's Judge Business School.

Papazian said Malaysia was already recognised as a leader and innovator in
developing the economics and structure of Islamic finance.

"I believe Malaysia's effort and strategic support of Islamic finance has
been critical variables in the development and growth of the industry as a
whole. I think Malaysia can do more by exploring its potential exponentially,"
he told reporters at the Invest Asia 2010 forum, organised by the International
Herald Tribune, here Monady.

Papazian was formerly head of Islamic finance at UBS Investment Bank with a
global and cross-business mandate to lead the business. He was among the
speakers at the two-day forum which started today.

"Across the Islamic world today, money is been created through conventional
methodology, even in Malaysia. I think it is critical for the country to explore
how deep Islamic finance can go, especially in terms of whether it can be used
for money creation or just product industry," Papazian said.

He said it was still early to say whether Islamic finance will become
dominant in the future against the conventional system, especially with Islamic
finance accounting for less than one per cent of total global conventional
finance.

He also said that small and medium enterprises (SMEs) should take the
opportunity to consider Islamic financing as an ideal mechanism instead of going
straight to debt or equity dilution.

Malaysia, through the efforts of Malaysia International Islamic Financial
Centre, has achieved a lot of recognition with over 30 years of experience in
developing the country's Islamic banking and finance industry.

As of May this year, Malaysia is home to the largest Islamic banking assets
with a current value of US$86 billion (RM284 billion) and the country has the
most number of Islamic fund managers with 152 firms managing a total of US$6.5
billion (RM21.4 billion) of funds.

The Invest Asia forum, entitled "Dawn of the New Decade", attracted about
800 business leaders, keen to look at investment options available around Asia
and the current sentiment towards the various Asian nations.

-- BERNAMA



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