QIB-owned AFB plans $500mn Islamic fund in Malaysia

DUBAI: Asian Finance Bank, majority owned by Qatar Islamic Bank, said yesterday it plans to launch a $500mn Islamic real estate fund next year to invest in property in Malaysia.

The bank also plans to set up a fully-fledged Islamic bank in Indonesia in 2010 in line with its efforts to expand in Asia.
The fund will capitalise on the drop in real estate prices following the global mortgage real estate crisis, said Faisal al-Showaikh, chief executive of Asian Finance Bank.

“Right now, the property market has suffered from sub-prime, so it is not something I would pursue aggressively,” he said, referring to defaults on low-end mortgages in the US that have rattled markets worldwide,” al-Showaikh said in an e-mailed statement.

“When you look at Indochina and other countries like Korea, Singapore, Hong Kong, I think the property market is very much undervalued in Malaysia,” he added. Islamic finance industry is growing by an average of 20% annually and is expected by Ernst and Young to grow $2tn in 2010, up from the current $900bn, largely thanks to a flood of petrodollars. Asian Finance Bank was founded in Malaysia in 2005.