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Wednesday, 18 July 2007

Malaysian banks as gateway to Islamic banking for Japanese banks

TOKYO -- Malaysian banks can be the gateway for banks in Japan to access the Islamic banking and financial market in Asia as well as the world due its strong foundation in the industry, International Trade and Industry Minister Datuk Seri Rafidah Aziz said Wednesday. The Islamic banking system's robust growth was evident with high profitability in 2006 and it has also been one of the services sectors aggressively promoted in Malaysia, she said."Indeed, Islamic banking per se is the fastest growing segment in Malaysian banking with Syariah-compliant asset rising to US$34 billion or 13 percent in terms of market share for less than three percent a decade ago," she told about 700 participants of the "Investment Opportunities in Malaysia" seminar here. The Islamic debt market has also seen tremendous growth, Rafidah said, adding that Islamic corporate bonds now amounted to US$36 billion or 48 percent of the total corporate bond in issue.The minister is in Tokyo, the key industrial city and capital of Japan, as part of her trade and investment mission from July 15 to 24. This is a second stop after Seoul, South Korea. She will also be going to Fukuoka and Hong Kong. Members of the mission include Malaysian Industrial Development Authority director-general Datuk R. Karunakaran, Malaysia External Trade Development Corporation chief executive officer Datuk Noharuddin Nordin, other government officials and representatives from the private sector.Present at today's seminar were Japan's Economy, Trade and Industry Minister Akira Amani and The Bank of Tokyo-Mitsubishi UFJ Ltd's chief executive officer for Asia and Oceania, Tatsuo Tanaka.In his speech, Amani also acknowledged Malaysia's capability in the Islamic banking and financial market."Anticipating the increased interest in Islamic finance, Malaysia has put into place a comprehensive Islamic finance system that includes best practices in legal and regulatory infrastructure, a diversity of market players and a wide range of products and services," Rafidah said.This advanced stage of development has prepared the enabling environment for Malaysia to further spur the growth of Islamic finance and evolve into an Islamic financial hub, offering itself as a gateway to promote investment and fund flow to the East Asian region, in particular between West Asia and East Asian countries like Japan, she said.In addition, Malaysia is also offering itself as a platform for the issuance of Islamic bonds, especially by multinationals and multilateral institutions, given the growing demand by Islamic and conventional investors, she added. - (Bernama, 18 July 07)

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