Robust and a world leader in the Islamic way
Friday October 7, 2011

ON July 1, 2011, the Shariah Governance Framework was implemented to further strengthen the oversight role, authority, accountability, independence and competency of the Board of Directors, the Shariah Committee and the Management of the Ismanic financial institutions on shariah matters.

Two Islamic indexes were launched in the first half of 2011, namely the Bloomberg Malaysian Foreign Currency Sukuk Index and Bloomberg-AIBIM-Bursa Malaysia Sovereign Shariah Index.

The first is a non-ringgit denominated index developed in conjunction with Bank Negara, which provides a global benchmark for the performance of sukuk and the ability to track movements of foreign currency issuances.

The second index is a collaboration between Bloomberg Association of Islamic Banks in Malaysia and Bursa Malaysia, which provides a performance benchmark for shariah compliant ringgit denominated Government securities to investors.

As at end July 2011, 847 shariah-compliant securities were hosted on Bursa Malaysia, representing 89% of total listed securities with a market capitalisation of RM826bil or 61.7% of total market capitalisation (end 2010: RM756.1bil; RM59.3%).

The trading volume of shariah-compliant securities rose to 111.5bil units or 59.4% of the total 187.7bil units traded during the first seven months of 2011 (Jan - July 2010: 88.5bil units; 66.4%; 133.9bil units.

Malaysia remained a leader in the global sukuk market outstanding as at end of the first half of 2011.

Bursa Malaysia is also the top sukuk listing destination, with 19 sukuk totalling RM88.3bil as at end July 2011 (US$29.6bil).

During the first seven months of 2011, one Islamic fund management licence was approved, bringing the number of full-fledged Islamic fund management companies to 16 (end 2010: 15 companies).

During the same period, eight Islamic unit trust funds were launched, reaching a total of 160 funds set up with a total net asset value of RM26.4bil as at end July 2011 (end 2010: 152 funds; RM24bil).

Total Islamic wholesale funds launched stood at 24 with an additional five funds launched during the first seven months of 2011 (end 2010: 19 funds).

The size of the Islamic wholesale funds in terms of net asset value (NAV) was RM7bil as at end July 2011 (end 2010: RM4.2bil).

Meanwhile, one Islamic exchange traded fund is listed with a NAV of RM579mil (end 2010: 1 ETF; RM626mil) while Islamic real estate investment trusts (REITs) stood at three with a market capitalisation of RM2.5bil as at end June 2011 (end 2010: 3 REITs; RM2.3bil).

The takaful industry continued to grow in the first seven months of 2011 underpined by increased domestic economic activities.

Assets of the takaful industry grew 16.8% to RM16.3bil, accounting for 8.7% of total assets in the insurance and takaful sector (Jan - July 2010: 19.5%; RM13.9bil; 8.3%)

New business contribution for family takaful declined slightly by 1.1% to RM1.58bil (Jan - July 2010: 25.8%; RM1.59bil), due to lower contributions in endowment products.

However, market penetration rate of family takaful improved to 12.1% as at July 2011 (end 2010: 10.9%)

For the general takaful sector, gross direct contributions increased 18.1% to RM917.5mil (Jan - July 2010: 27.6%; RM776.7mil) due to higher contributions from motor and medical businesses.

However, operating profits for the sector declined 32.7% to RM103.6mil (Jan - July 2010: RM154mil) due to higher net claims incurred mainly in the motor class business during the period.

Source : http://thestar.com.my/news/story.asp?file=/2011/10/7/ecoreport/9642040&sec=ecoreport