Asia Asset Management

#Malaysia seeks to catapult Islamic finance to the next level

Malaysia’s Islamic finance industry has grown tremendously since 2004, when Bank Negara Malaysia began issuing Islamic banking licenses to foreign Islamic banks. The strong growth is also reflected in the country's Islamic asset management industry, with Malaysia accounting for 34% of the US$78 billion global Islamic assets under management as at the end of 2016. Malaysia strongly believes that Islamic finance must continue to appeal to the broader community.

Emirates NBD and UTI International to launch Islamic #funds in #India

Emirates NBD Asset Management (Emirates NBD) has entered into a partnership agreement with UTI International (UTI) to launch the Emirates Islamic India Equity Fund. The fund will expand Emirates NBD’s global portfolio and offer investors exposure to Shariah compliant Indian equities. Emirates NBD is looking to develop a portfolio of global funds with leading international partners, and its latest collaboration with UTI forms part of this strategy. Leo Puri, managing director of UTI, said the new fund presents an excellent opportunity for GCC investors to realise strong returns on Shariah compliant Indian equities. The rationale for the agreement is driven by Emirates NBD’s strong interest in India as a growth market. According to a recent McKinsey report, India is expected to rank in the top five global economies by 2020 and to reach the top three by 2030.

Steady demand for Islamic bonds expected to lend support to #sukuk market

The recovery of the sukuk market is expected to continue as the threat of a steep increase in US interest rates is quickly diminishing. Based on the view of lower interest rates for a longer period, CEO of Maybank Islamic Asset Management, Ahmad Najib Nazlan has a cautiously optimistic outlook on the sukuk market. Following a renewed positive sentiment, Indonesia’s Financial Services Authority (OJK) recently called on state-owned firms to issue more Islamic bonds. In Malaysia the Employees Provident Fund (EPF) is also calling on the government to increase the supply of ringgit sukuk as it gears up for the launch of its shariah-compliant option for contributors in January 2017.

EPF makes new strides in ESG investing

#Malaysia’s Employees Provident Fund (EPF) announced plans to divest its stakes in tobacco businesses and focus on investing in assets deemed socially and environmentally responsible. CEO Shahril Ridza Ridzuan said EPF plans to dispose of its stake in British American Tobacco (Malaysia), despite not outlining a specific timeframe for the move. The first fully shariah-compliant fund (EPF-i) is planned to launch in January 2017 with an initial fund size of between 80 and 100 bin ringgit. Preparing for the launch of the EPF-i, the fund had increased its exposure to shariah-compliant investments covering multi-asset classes to about 40% of total investments.

Malaysia launches first ASEAN-wide Islamic ETF

Malaysian fund manager i-VCAP Management has launched Southeast Asia’s first fully Sharia-compliant ETF, which will track equities in markets including Malaysia, Indonesia, Thailand, Singapore and the Philippines. Malaysia is arguably the planet's top market for Islamic and Sharia-compliant products, with an estimated US$135 billion or so in such assets. The MyETF MSCI SEA Islamic Dividend ETF is i-VCAP Management's third ETF, following the launch of two other similarly-themed Sharia-compliant ETFs.

Big in Brunei

Asia Asset Management’s 10th Annual Brunei Roundtable took place on Monday, October 13, themed “A Decade of Progress and Growth: The Roadmap Ahead”. The Borneo Bulletin reported about the event, saying Brunei’s biggest advantage is its capital. However, the ountry needs to slowly get the right infrastructure, the right air links and the right niche for people to actually want to come here. The insurance sector on the other hand is a bit easier as it is all about preparations, regulations, how much they are willing to do it and opening an investment. Brunei in itself is a very liquid market in the sense that it really doesn’t need foreign bonds.

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