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Thursday, 6 November 2008

Malaysia: Selangor to be Islamic financial hub

SHAH ALAM: The Selangor government plans to make the state an international Islamic financial hub on the back of its readily available information and communication technology (ICT) and syariah-compliant infrastructure to tackle the current slowing global economy, said Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim.
“I plan to discuss with I-Bhd and other parties here in Shah Alam with regard to the idea of turning this area into the centre of Islamic banking and financial hub,” he told reporters after endorsing i-City as an international park here yesterday.
i-City, which is a privately funded five-year integrated commercial development with a total value of RM2 billion, is currently Malaysia’s first commercial property to have a full range of fibre optics network with a capacity up to 10 gigabits per second.
The 72-acre (29-hectare) freehold development project is currently undertaken by Main Board-listed I-Bhd and partners like the Australian based ServCorp Ltd, Office Squared Pty Ltd and US-based Cisco System Inc.
With the international park endorsement, i-City is entitled to offer cosmopolitan lifestyle components for leisure and entertainment to cater to both the local and international communities here.
Asked on how the state government planned to make Selangor into an Islamic financial hub, Khalid said: “I-Bhd will provide the technology centre. As you know when you do international banking, you will require high-speed transactions and the infrastructure of teleconferencing and all that will be here.
“While we will also offer all the facilities that are needed to provide the fund managers, the investment mangers and venture capitalists to sit down and discuss whatever undertakings they want to do.”
Commenting on the rationale behind the plan, Khalid said: “For one, the Middle Eastern investors are currently looking for alternative investment opportunities. They have a slightly horrifying experience in Europe and America.
“Now they will look at where the centre of growth will be, which is in the Asean region or the Asia region. At the same time, Malaysia had excelled itself in the development of syariah laws and syariah infrastructures, including the accounting and legal framework for this Islamic banking.”
Khalid said the state government aimed to embark on the proposal to turn Selangor into an Islamic financial hub by the second half of next year, based on the assumption that the current volatile global economy had already subsided by then.
He said the proposal was also part of the state government’s plan to reduce its dependency on the manufacturing sector and to attract foreign direct investment (FDI) as the country moved gradually into a knowledge-based economy.
Saudi Arabia-based Al Rajhi Bank, which is the world’s largest Islamic bank, had on July 28, 2008 agreed to acquire 36 units of i-City Cybercentre 1 Office Suites for RM95 million, marking the bank’s first property venture in Malaysia.
Another upcoming Islamic financial hub is Iskandar Malaysia, which is located in Johor. The development has also attracted foreign investors like Kuwait Finance House.
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