Wednesday, January 16, 2008

Bank Negara proposes Asian Sukuk Fund

BusinessTimes

BANK Negara Malaysia's governor yesterday suggested that Asia's central banks team up to set up a fund which will invest in Islamic bonds in the region.

The Asian Sukuk Fund would be an extension of the Asian Bond Fund (ABF), which was launched in 2003.The central banks launched their first ABF in 2003 by investing US$1 billion (RM3.25 billion) in dollar-denominated debt issued by Asian governments and official entities.

Tan Sri Dr Zeti Akhtar Aziz told an Islamic finance seminar in Hong Kong that there is immense potential to be tapped in Southeast Asia alone when it comes to Islamic finance.

Strategic alliances among Islamic finance players would also help develop the industry further, she said."Conventional financial institutions may also enter into alliances with Islamic financial institutions to be co-arrangers, to structure sukuk or other Islamic products based on syariah-compliant assets in this region."

Zeti said potential issuers may leverage on Malaysia's sukuk platform and its strength as the world's largest sukuk issuance centre with over US$56 billion (RM182 billion) or 62 per cent of the world's sukuk issues.

This was in addition to the ability to issue multi-currency sukuk and the flexibility to swap ringgit funding into other currencies.

Disclaimer: Reading materials in this site are obtained from its respective website and it is for information purposes only. It is not Malaysia Unit Trusts - administrator view and it is not to be used against Malaysia Unit Trusts - administrator.