Malaysia, Saudi Arabia Remain Biggest Markets For Islamic Asset Management

Bernama) -- Malaysia and Arab Saudi have remained the largest two markets in the world for Islamic asset management which stands at US$1.34 billion (RM4.35 billion) currently.

Overall, syariah based investment funds in the Gulf States and Middle East have hit US$267 billion (RM868.15 billion), a report in the Arab Saudi newspaper, Dar El Hayah, said.

The report was based on the Ernst & Young Islamic Funds and Investment Report 2008 (IFIR) published Wednesday in conjunction with the World Islamic Funds and Capital Markets Conference held in Manama, the capital city of Bahrain.

The report said that more than 500 funds fulfilling the conditions of Syariah were managed throughout the world as of March 31 this year.

It said there were 134 Islamic mutual funds in Malaysia, representing 10 percent of the total asset management funds in the country, while in Saudi Arabia there were 120 funds or 55 percent of its total funds.

"Yet, both the markets will need to differentiate and become more creative in arranging their investment strategies," it said.

"While in Saudi Arabia, Islamic financial products are still an alternative to conventional financial products, in Malaysia they have been more widely accepted. Meaning, investors are ready to trade in both types of the financial products," the report said.

"What is interesting is that the diversification of Islamic assets sector in Malaysia has created an Islamic investment environment that is competitive and capable of attracting more investors including non Muslim investors," the report said.

Meanwhile the head of Financial Services Ernst & Young Bahrain, Sameer Abdi said although the Islamic funds sector in the Gulf countries was growing, more diversification was required to attract more foreign investors.