4 days ago
- Business
- Malaysian Reserve
Bursa Malaysia CEO: Islamic finance must evolve to stay competitive
KUALA LUMPUR — The growth of Islamic finance will be driven by greater connectivity across asset classes, geographies and generations – and not just by compliance – as a generational shift in investor demographics brings in younger, digital-native and value-conscious investors.
Bursa Malaysia Bhd chief executive officer Datuk Fad'l Mohamed (picture) said today's investors are drawn to offerings that are digital-first, value-aligned and exposed to emerging digital asset classes, including tokenised instruments.
'These shifts call on all of us – exchanges, regulators, asset managers and scholars – to work together to ensure that Islamic finance stays relevant and competitive, not just in what it represents, but in how it evolves to meet the changing needs of the market and investors,' he said in his welcoming remark at the Invest Shariah Conference 2025 today.
CGS International Securities Malaysia and Bursa Malaysia co-hosted the conference themed 'Innovating Islamic Finance: Unlocking Global Investment Potential'.
Fad'l also added that Malaysia's Islamic capital market remains among the most developed globally, anchored by robust regulation, a credible shariah framework and a diverse base of issuers and investors.
'As at end-April 2025, Malaysia's Islamic capital market was valued at RM2.56 trillion, representing 63 per cent of the total domestic capital market size of RM4.04 trillion.
He also said shariah market capitalisation stood at RM1.3 trillion or 66.1 per cent of the stock exchange's market capitalisation of RM1.9 trillion as at end-July.
Fad'l also elaborated that shariah-compliant average daily trading value (ADV) reached RM1.6 billion or 64.4 per cent of the overall ADV of RM 2.4 billion, and 860, or 81 per cent of 1,065 Bursa Malaysia-listed companies were shariah-compliant.
Global Islamic finance assets surpassed US$5 trillion last year, a 12 per cent rise from 2023, and a 43 per cent increase since 2020. By 2028, the industry is projected to reach US$7.5 trillion, reflecting the rising demand for shariah-compliant finance across markets and asset classes.
CGS Malaysia CEO Azizah Mohd Yatim said Malaysia has an established, internationally recognised framework and end-to-end ecosystem for the Islamic capital market, with depth and breadth of shariah products, assets and instruments to 'export' its products and solutions regionally and globally.
'Islamic capital market and shariah instruments provide a fundamental, value-based approach that investors and businesses can trust. This is especially important in today's environment, and their growing demand is proof of the proposition,' she said.
'CGS Malaysia has become the first broker in Malaysia to launch the Islamic Equity Linked Investment Notes and Islamic Autocallable Equity Structured Investment Notes, structured products for sophisticated investors.
'In the coming months, we will be rolling out Islamic repurchase agreement products in Malaysia and Environmental, Sustainable and Governance (ESG) Margin Financing-i in Singapore and Indonesia,' she added.
Globally, 80 per cent of the Islamic finance industry assets remain concentrated in five markets: Iran, Saudi Arabia, Malaysia, the United Arab Emirates and Kuwait.
Meanwhile, the full-day conference featured panel discussions and fireside chats covering the strengthening of capital flows between Asia and the Middle East, the rise of private equity and venture capital in Islamic capital markets, and the role of digital transformation in reshaping shariah-compliant investment products.
Speakers also explored how the Islamic capital market can serve as a driver of inclusive growth, highlighting emerging opportunities in fintech, multi-asset investments, ESG integration, and sukuk issuance. — BERNAMA
