ID :
30755
Mon, 11/17/2008 - 18:26
Auther :
Shortlink :
https://oananews.org//node/30755
The shortlink copeid
ISLAMIC FINANCE A VIABLE ALTERNATIVE TO CONVENTIONAL FINANCE
KUALA LUMPUR, Nov 17 (Bernama) -- The current financial turmoil has provided
an opportunity for Islamic finance to position itself as a viable alternative to
conventional finance by providing investors with other asset classes and markets
that provide stability, the Regent of Perak Raja Nazrin Shah said.
Perak is one of the 13 states of Malaysia. It is the second largest state in
Peninsular Malaysia bordering Kedah and Yala Province of Thailand to the north,
Penang to the northwest, Kelantan and Pahang to the east, Selangor southward and
to the west by the Strait of Malacca.
He said there was much talk these days about the creation of a new
international economic order.
"Some world leaders have called for a Bretton Woods II. There is growing
consensus that the unregulated capitalism that has led us to this crisis needs
to be reconfigured to provide greater resilience and stability to the financial
system.
"The strengths of Islamic finance are derived from syariah principles,
which
also happen to be sound business principles.
"The syariah injunctions require that financial transactions be accompanied
by an underlying productive activity thus giving ride to a close link between
financial and productive flows," he said in his address at the launch of "The
Malaysian Sukuk (Bond) Market Handbook -- Your Guide to the Malaysian Islamic
Capital Market," here Monday.
Raja Nazrin said syariah principles prohibited excessive leverage and
speculative financial activities thereby insulating the parties involved from
too much risk exposure.
"It is worth speculating to what extent the world financial crisis could
have been averted, or at least its impact considerably reduced, if the
principles of Islamic finance had been more widely practised," he said.
He said there was now a greater awareness and interest among the world
financial community of the merits of Islamic finance.
The Perak Regent said there was already a growing demand for Islamic
financial products in the global market, far exceeding their supply.
Raja Nazrin said in recent years, "we have witnessed a rapid expansion of
the Islamic financial services industry."
"Today, Islamic finance is fast becoming an accepted component of the
global
financial system.
"Malaysia's direct involvement in the development of Islamic finance has
significantly transformed the financial landscape at both the national and
international levels, making the country a leader in the international race to
become a major Islamic financial centrem" he said.
He said the vibrancy and dynamism of Malaysia's Islamic financial system
today was reflected in its continuous product innovation, diversity of Islamic
financial institutions, comprehensive regulatory and legal infrastructure, as
well as the availability of Islamic finance talent and expertise.
Raja Nazrin said the Islamic capital market in Malaysia today offered a
wide
range of retail and wholesale products such as syariah-compliant stocks, Islamic
unit trust funds, Islamic exchange-traded funds, syariah-compliant real estate
investment trusts, structured products and derivatives.
"These world-class financial products are available in both ringgit and
non-ringgit currencies," he said.
On sukuk, he said, the country has not only achieved several industry
"firsts", but has also successfully developed a deep and liquid market.
"We can lay claim to being the world's largest and most innovative sukuk
market.
"At end-2007, total sukuk originating from Malaysia amounted to RM213
billion (US$62 billion), constituting 68.9 per cent of the global sukuk
outstanding," he said.
In the same year, the regent said, the world's largest sukuk, amounting to
RM15 billion (US$5 billion) was raised in the Malaysian sukuk market.
"Following the liberalisation of our foreign exchange administration rules,
several foreign development banks, quasi-sovereign agencies and multinational
corporations have joined our local corporations in tapping the local sukuk
market for funds," he said.
He said the rapid growth of the sukuk market has been nothing short of
remarkable.
"As a pioneer, Malaysia has set standards and provided leadership by
example
on many fronts," he said.
Raja Nazrin said the handbook by RAM Ratings would serve as a guide to
institutions and professionals, particularly those from the international
community who were keen to make the most of the Malaysian capital market for
creating and transacting in sukuk.
-- BERNAMA
an opportunity for Islamic finance to position itself as a viable alternative to
conventional finance by providing investors with other asset classes and markets
that provide stability, the Regent of Perak Raja Nazrin Shah said.
Perak is one of the 13 states of Malaysia. It is the second largest state in
Peninsular Malaysia bordering Kedah and Yala Province of Thailand to the north,
Penang to the northwest, Kelantan and Pahang to the east, Selangor southward and
to the west by the Strait of Malacca.
He said there was much talk these days about the creation of a new
international economic order.
"Some world leaders have called for a Bretton Woods II. There is growing
consensus that the unregulated capitalism that has led us to this crisis needs
to be reconfigured to provide greater resilience and stability to the financial
system.
"The strengths of Islamic finance are derived from syariah principles,
which
also happen to be sound business principles.
"The syariah injunctions require that financial transactions be accompanied
by an underlying productive activity thus giving ride to a close link between
financial and productive flows," he said in his address at the launch of "The
Malaysian Sukuk (Bond) Market Handbook -- Your Guide to the Malaysian Islamic
Capital Market," here Monday.
Raja Nazrin said syariah principles prohibited excessive leverage and
speculative financial activities thereby insulating the parties involved from
too much risk exposure.
"It is worth speculating to what extent the world financial crisis could
have been averted, or at least its impact considerably reduced, if the
principles of Islamic finance had been more widely practised," he said.
He said there was now a greater awareness and interest among the world
financial community of the merits of Islamic finance.
The Perak Regent said there was already a growing demand for Islamic
financial products in the global market, far exceeding their supply.
Raja Nazrin said in recent years, "we have witnessed a rapid expansion of
the Islamic financial services industry."
"Today, Islamic finance is fast becoming an accepted component of the
global
financial system.
"Malaysia's direct involvement in the development of Islamic finance has
significantly transformed the financial landscape at both the national and
international levels, making the country a leader in the international race to
become a major Islamic financial centrem" he said.
He said the vibrancy and dynamism of Malaysia's Islamic financial system
today was reflected in its continuous product innovation, diversity of Islamic
financial institutions, comprehensive regulatory and legal infrastructure, as
well as the availability of Islamic finance talent and expertise.
Raja Nazrin said the Islamic capital market in Malaysia today offered a
wide
range of retail and wholesale products such as syariah-compliant stocks, Islamic
unit trust funds, Islamic exchange-traded funds, syariah-compliant real estate
investment trusts, structured products and derivatives.
"These world-class financial products are available in both ringgit and
non-ringgit currencies," he said.
On sukuk, he said, the country has not only achieved several industry
"firsts", but has also successfully developed a deep and liquid market.
"We can lay claim to being the world's largest and most innovative sukuk
market.
"At end-2007, total sukuk originating from Malaysia amounted to RM213
billion (US$62 billion), constituting 68.9 per cent of the global sukuk
outstanding," he said.
In the same year, the regent said, the world's largest sukuk, amounting to
RM15 billion (US$5 billion) was raised in the Malaysian sukuk market.
"Following the liberalisation of our foreign exchange administration rules,
several foreign development banks, quasi-sovereign agencies and multinational
corporations have joined our local corporations in tapping the local sukuk
market for funds," he said.
He said the rapid growth of the sukuk market has been nothing short of
remarkable.
"As a pioneer, Malaysia has set standards and provided leadership by
example
on many fronts," he said.
Raja Nazrin said the handbook by RAM Ratings would serve as a guide to
institutions and professionals, particularly those from the international
community who were keen to make the most of the Malaysian capital market for
creating and transacting in sukuk.
-- BERNAMA
