KUALA LUMPUR (Oct 13): The total assets of Islamic banking expanded by 8.1% to RM1.29 billion as at end of July this year, accounting for 36.4% of the market share, according to the Ministry of Finance’s (MOF) 2024 Economic Outlook report.
The ministry said the total Islamic financing outstanding grew by 9.1% to RM884.1 billion as at end July, which outpaced the growth trend in the conventional banking sector.
The ministry also noted that the Islamic Capital Market (ICM) continues to lead Malaysia’s capital market in fundraising and investing.
“As at end July, the domestic size of ICM was valued at RM2.40 billion, accounting for 64.4% of total capital market size.
“Furthermore, the size of ICM increased further by 7.9%, with the sukuk market becoming more attractive to investors,” it said.
The MOF said that during the first seven months of this year, sukuk issuances amounted to RM178.2 billion or 61.7% of total issuances.
The increasing demand from the private sector for shariah-compliant instruments continues to fuel the issuances of sukuk, the ministry said, adding that Malaysia continued to record the largest share of global sukuk outstanding at 38.8% as at end July.
“Malaysian sukuk have often been considered attractive, attributed to competitive yields and a reputation for strong regulatory oversight.
“Additionally, Malaysia’s efforts to become a hub for Islamic finance have garnered interest from foreign institutional investors in diversifying investment portfolios.
“However, global sukuk issuances are likely to rise slowly for the year, amid slower growth and market volatility but will remain a key funding source in core Islamic finance markets,” said the MOF.
The MOF also noted that as at end July, a total of 807 or 81.8% out of a total of 987 companies listed on Bursa Malaysia were shariah-compliant.
The market capitalisation of shariah-compliant securities stood at RM1.15 billion or 65.1% of the total market capitalisation of listed companies on Bursa Malaysia.
Click here to read more about the Economic Report 2023/2024.