KUALA LUMPUR, March 10 (NNN-BERNAMA) — The Dubai debt crisis does not represent a permanent setback to Islamic finance although the sukuk, or Islamic bond, suffered a blow as a potentially safer financial instrument than conventional bonds, says Malaysian Deputy Minister of International Trade and Industry Mukhriz Mahathir.

This was because of the reasonable disenchantment with the banking and financial system as practised in the West, he said at the launch of a Shariah-compliant close-end fund, AMB Dana Aqeel Capital Protected Fund, here Tuesday.

However, a marked slowdown in business could occur, Mukhriz said, adding that the Islamic finance players in the country must be prepared to counter the impending negative effects from the uncertainties in the global market.

“We must aggressively open up new markets as the present capital-surplus countries that have been buying our Islamic products may be undergoing a slowdown from reduced revenue from commodities,” he added.

Mukhriz said Islamic unit trusts had emerged as a significant growth area for the overall unit trust and fund management industry in Malaysia. From just 17 products in 2000, the unit trust industry now offered 144 Islamic unit trusts products in both equity and bond categories, he noted.

“The viability of Islamic unit trusts is evident from their acceptance by investors with the total net asset value (NAV) of the products touching 22.0 billion Ringgit (one USD = about 3.4 Ringgit), or 11 per cent of the entire industry’s NAV of 200 billion Ringgit,” he added.
– NNN-BERNAMA

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