Islamic fintech has been identified by the Capital Markets Malaysia (CMM) as a key growth driver for Malaysia’s Shariah capital markets and will be a key focus of the entity moving forward.
“We want to position our global leadership in Islamic capital markets by [enhancing] the depth and breadth of Islamic fintech in Malaysia — this is an area we are really excited about,” shares Zalina Shamsudin, the general manager of CMM. “ECF [equity crowdfunding] and P2P [peer-to-peer finance] have done really well in Malaysia but the Shariah side is only starting to grow — we have just licensed the Islamic players with the right rule book. So, we are creating awareness in this space and given the fact that start-ups play a big role in the Malaysian economy, we feel this will be a natural place for them to raise Shariah funding for their needs.”
This Islamic fintech pillar coincides with one of the few main focuses of the CMM for 2020, particularly the private market.
“Our mainstay is to profile the Malaysian market – to position ourselves international as an ASEAN country who is a global leader in Islamic capital markets, who is also leading in sustainability and we are trying to show that we are creating depths in new areas in the capital markets. For example, traditionally when you talk about the capital market, you talk about the public markets such as IPOs, bonds and Sukuk. But in recent years, you see a lot of growth in the private market. There is a lot of interest in PE & VC [private equity and venture capital], ECF and P2P – there’s a global shift toward that and we see that shift in Malaysia as well,” Zalina explains to IFN.
Alongside these initiatives, CMM is also working on introducing a third sustainability-driven center of excellence to enhance Malaysia’s domestic and global leadership in the Islamic capital markets.
These are part of the Securities Commission Malaysia-affiliated entity’s three-year strategy to leverage sustainable and responsible investments to boost and anchor the country’s international lead in the Shariah capital market space.
CMM has so far launched two centers of excellence (COEs): the Global Compact Network Malaysia Center of Excellence which focuses on the private sector; and the Malaysian Sustainability Finance Initiative, a collaboration with the UK government through the British High Commission in Kuala Lumpur, to build the capacities of financial intermediaries in meeting their sustainability agenda. The third COE will focus on the investor community.
“A few of them [investors] have already aligned their investment priorities toward sustainability and we are trying to help others who are not aligned yet to figure out how to get there,” Zalina explains.
At the heart of these COEs are capacity-building and awareness enhancement. These are achieved through forums and meetings with stakeholders, workshops as well as a specially curated knowledge platform for information exchange and sharing of best practices as well as emerging opportunities. This is an excerpt of an interview with Zalina Shamsudin, the general manager of Capital Markets Malaysia. For the full discussion on CMM’s strategic plans including a focus on developing the private markets, log on to IFN Podcasts.