Latest SC Data Show Steady Progress of Malaysian ICM (By MIFC)

Last Updated : 13 Sep 2012


The latest statistics released in August 2012 by the Securities Commission Malaysia (SC) show that the total size of the public and corporate Sukuk issued in the First Half 2012 amounted to RM153.9 billion (USD51.3 billion) compared with RM90.6 billion (USD30.2 billion) for the same period in 2011. The percentage of Sukuk issued to the total bonds issued increased from 35 per cent to 49 per cent for the same period.

Similarly, the total size of the public and corporate Sukuk outstanding in the First Half 2012 amounted to RM420.8 billion (USD140.27 billion) compared with RM315.6 billion (USD105.2 billion) for the same period in 2011. The percentage of Sukuk outstanding to the total bonds outstanding increased from 38 per cent to 44 per cent for the same period.

In the Sukuk market, government-linked companies (GLCs) and quasi-sovereigns such as Khazanah Nasional Berhad (the Malaysian sovereign wealth fund); Cagamas Berhad (the Mortgage Corporation of Malaysia); PLUS Berhad (a highway operator) have been setting the pace in Sukuk issuances in 2012.

The total Malaysian Islamic capital market (ICM) under CMP2 is projected to reach almost three trillion ringgit, RM2,882.6 billion (USD960.87 billion) to be precise, in the year 2020, with the Sukuk market set to break the one trillion ringgit barrier to account for RM1,331.5 billion (USD443.83 billion) worth of issuances and the market capitalisation of Shariah-compliant companies accounting for RM1,551 billion (USD517 billion).

The fact that the compound annual growth rate (CAGR) for the ICM for the decade 2010-2020 is projected at a healthy double digit 10.6 percent compared with 13.6 percent for the previous decade suggests that the growth prospects for the most developed Islamic capital markets in the world is indeed sustainable and exciting.

These projections by the Securities Commission Malaysia, the capital market regulator, and as detailed in the Capital Markets Master Plan 2 (CMP2), together with the latest data for the ICM augurs well for the development of the Malaysian and regional ICM.

The latest data also revealed that at the end of June 2012, there were 166 Islamic unit trust funds (UTFs) in Malaysia with a total net asset value (NAV) of RM31 billion (USD10.33 billion). This is compared with 157 Islamic UTFs with a NAV of RM26 billion (USD8.67 billion) for the same period in 2011.

Similarly, there were 30 Islamic wholesale funds (WFs) compared with 24 for the same period with NAV’s totalling RM11 billion (USD3.67 billion) in First Half 2012 compared with RM7 billion USD2.33 billion) in First Half 2011. In total Islamic asset under management (AUM) increased from RM58 billion (USD19.33 billion) to RM63 billion (USD21 billion) for the same period respectively.

In addition, at end June 2012, there was one Islamic exchange traded fund (ETF) with a NAV of RM300 million (USD100 million); three Islamic Real Estate Investment Funds (REITS) with a total market capitalisation of RM3.3 billion (USD1.1 billion).

At the same time, the SC also published the latest list of registered Shariah advisers. The figures show that at the end of July 2012, there were 47 individual Shariah advisers registered with the SC from Malaysia and several countries especially the Gulf Cooperation Council (GCC) states. There were also 9 Shariah advisory firms registered with the Commission and 10 Registered Shariah Advisers in relation to global Sukuk issuance (road-show offering) in Malaysia.