WIEF 2016– Indonesia, Malaysia to team up in developing shariah capital markets

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IDX President Director Tito Sulistio (4th from left) and Bursa Malaysia CEO Datuk Seri Tajuddin Atan (3rd from left) pose for photo session after signing an MOU to jointly develop shariah capital market s.

JAKARTA (TheInsiderStories) – The Indonesian Stock Exchange (IDX) and its Malaysian counterpart Bursa Malaysia has signed Memorandum of Understanding (MoU) to jointly develop shariah capital markets in the two countries to accelerate the growth of shariah financing in the two countries.

The MoU was signed on the sideline of the World Islamic Economic Forum (WIEF) in Jakarta by IDX President Director Tito Sulistio and Bursa Malaysia CEO Datuk Seri Tajuddin Atan. The cooperation will cover joint studies, product development, joint events and promotions as well as the improvement of human resources.

Tito Sulistio said that this cooperation is part of the drive of the two countries to become a leading Islamic capital markets hub in the world. He said Indonesia can learn from Malaysia given its more advanced development of shariah industry.

“Through this partnership, we hope Indonesia Stock Exchange and Bursa Malaysia can continue to develop instruments and products of Islamic capital markets together as a reference at the global level,” Tito said.

“Malaysia has the largest shariah financial market in the world while Indonesia has the largest Muslim population. By working together, I am confident that we can become reference for shariah products in the world,” Tito told reporters.

Tito said among products that can be jointly developed are sukuk syariah, Muslim product, halal product. “We hope we can launch our first joint product within six months,” Tito said.

He is confident that the collaboration could fuel the growth of the Islamic capital market for both Malaysia and Indonesia, be it via product development or market promotion.

Shariah economy has been developing rapidly to become of the fastest growing markets in the world, which is in contract to the slowdown of global economy.

Based on a report in the State of the Global Islamic Economy 2015, global Islamic markets are estimated to have US$1.81 trillion assets in value. Of this, US$295 billion in an outstanding value of sukuk with an average 6% growth per year.

The value of global Islamic financial market assets in 2014 had increased by 9.69% compared to US$1.65 trillion in 2013. With the growth of Islamic financial market in the world, the assets of the global Islamic financial market is expected to grow to US$3.24 trillion in 2020.

In Southeast Asian Nations (ASEAN), Malaysia is currently the largest shariah financial market in the world and Indonesia has the largest Muslim population in the world. With a total population of 250 million people, Indonesia has the potential to become a largest shariah market in the future. Currently, shariah financial assets is still below 5%.

For Malaysia, Indonesia is the seventh largest trading partner and third among the ASEAN countries as of 2015, with a healthy level of current and new business opportunities between the two countries. With a combined total population of almost 300 million, both countries have much to offer and benefit from this MOU for retail and institutional investors.

Indonesian President Joko Widodo and Malaysian Prime Minister Dato’ Sri Najib Tun Abdul Razak opened the 12th World Islamic Economic Forum (WIEF) today (Aug. 2) which will take place on August 2-4, 2016.

The WIEF Foundation organizes the annual World Islamic Economic Forum, a global business platform showcasing business opportunities in the Muslim world and runs programs of the various initiatives that strengthen people partnership and knowledge exchange between Muslim and non-Muslim communities across the globe.  (*)

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Source: The Insiderstories
WIEF 2016– Indonesia, Malaysia to team up in developing shariah capital markets

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