MALAYSIA ATTRACTS FUNDS FROM NON-TRADITIONAL SOURCES

KUALA LUMPUR, June 26 (Bernama) -- The current economic crisis has presented
Malaysia with an opportunity to attract funds from non-traditional sources,
including the Middle East, Deputy Prime Minister Muhyiddin Yassin said
Friday.

Given the more cautious sentiment amid the current adverse environment,
investors are now turning to Islamic finance as a more stable and resilient
alternative to its conventional counterpart, he said.

"There is huge potential for Islamic finance, with global Islamic assets
currently worth RM750 billion (US$214.28 billion) and expected to exceed RM1
trillion (US$0.28 trillion) by 2010," Muhyiddin said at the 2009 RAM League
Awards organised by RAM Holdings Berhad.

The rising demand has facilitated the development of new Islamic financial
instruments in the market, he said.

About 60 percent of the world's sukuk issuance originated from the domestic
capital market last year, underscoring Malaysia as the leader in the global
sukuk market, Muhyiddin said.

Another RM6.4 billion (US$1.82 billion) was issued in the first quarter of
2009, he said.

"Malaysia is fast becoming a regional hub for Islamic finance, in tandem
with efforts by the government and industry regulators to make Malaysia an
international Islamic financial centre," Muhyiddin said.

"The domestic Islamic capital market has experienced exponential growth, and
Malaysia is well poised as a competitive and attractive sukuk market," he said.

Muhyiddin said the recent financial liberalisation measures which allowed
two new foreign Islamic banks and two new family takaful operators as well as an
increase in foreign equity of up to 70 percent for domestic Islamic banks, will
further reinforce Malaysia as an international Islamic financial hub.

"The key drivers of the new economic model will be creativity, innovation
and high value-added activities," he said.

According to him, the development of niche growth areas, including Islamic
finance and tourism, will be further accelerated, helping to enhance the
services sector's contribution to the economy.

Muhyiddin said moving forward, the government hoped to see a bustling
capital market with a broader spectrum of companies and investors, together with
a well-developed bond market.

Thus, he said, the government will continue to take the necessary measures
to ensure that the Malaysian market remained attractive and highly competitive.

"Whether through conventional bonds or sukuk, we will continue striving to
promote Malaysia as a funding oasis in this region," he added.
-- BERNAMA