IMF Competitiveness Report 2016

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While this is not a report by International Monetary Fund (IMF) on Islamic Banking per se in Malaysia, I include the report nonetheless to give an overall outlook of the Malaysian market in 2016. This particular year, in my view, was a tough year for Malaysia, with all that’s happening in the world and the uncertainty arising from many events politically. So it is interesting that Malaysia has come out fairly good, although the common suspects are still there; reduced oil & gas earnings, increase in household debt and meteoric rise in residential properties prices.

But mention of Islamic Finance is small, so I extracted the whole paragraph for your reading (that’s all there is!!!).

Again, the intention is to give an overall view of the Malaysian market for 2016.

Extract

Malaysia is a world leader and standard-setter in Islamic finance. In recent years, the government increased the use of Islamic debt instruments for funding purposes. In April 2016, the government issued its fifth dollar-denominated sovereign sukuk (Malaysia 2026, and Malaysia 2046) for US$1.5 billion using nonphysical assets as collateral.

The total outstanding stock of government Islamic securities is approaching that of Malaysian government securities. The main reasons behind increasing issuance of sukuk in recent years have been healthy demand and a desire to develop the market. The inclusion of Islamic debt securities in some global bond indexes provided a boost. The primary auctions for sukuk in Malaysia have consistently generated higher cover ratios than for equivalent conventional instruments, and the spreads between conventional bonds and sukuk have declined steadily over time.

DOWNLOAD THE FULL REPORT HERE : IMF Competitive Report 2016 Malaysia

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