KUALA LUMPUR (Jan 17): Malaysia's Employees Provident Fund (EPF) will allocate a further 50 billion ringgit (US$11.20 billion) to its Islamic fund in 2018, potentially boosting the domestic Islamic finance market.

The additional injection was more than the 20 to 30 billion ringgit the fund had estimated it would allocate for 2018.

Malaysia is a leading market in the global Islamic finance industry in terms of regulation, standardisation and sukuk issuance. The country issues more than half of the world's sukuk in the first half of 2016.

For 2017, the retirement savings fund has already allocated 100 billion ringgit for the fund, which is equivalent to about 15% of the EPF's total investments of 681.71 billion ringgit as of March 2016.

Of the initial 100 billion ringgit allocated, a total of 59.03 billion ringgit have been taken up, the pension fund said in a statement on Tuesday.

Chief executive officer Shahril Ridza Ridzuan said the fund had anticipated that at least half of the initial 100 billion ringgit fund to be taken up.

"For (the 2018 shariah fund), we have allocated 50 billion ringgit as further injection," Ridzuan said in the statement.

He said that about 45 per cent of EPF's total investment assets are shariah compliant and the fund expects to grow these assets by at least 25 billion ringgit a year on average. 

(US$1 = 4.4650 ringgit)