LAST_UPDATETue, 19 Jun 2018 2pm

Islamic Equity Class Should Explore Solutions To Stay Competitive - Sultan Nazrin

Sultan Nazrin ShahSultan Nazrin Shah

KUALA LUMPUR – The Islamic equity asset class needs to explore solutions to the challenge of scale, with the aim of achieving critical mass volume in order to remain competitive, said the Sultan of Perak, Sultan Nazrin Shah.

He said this was among the key areas that should be addressed for Islamic finance to move forward.

“Returns to Islamic funds must be stabilised to reinvigorate investor confidence and an unparalleled benchmark for governance that balances financial and ethical considerations must be established.

“Additionally, Islamic finance must embrace the era of disruptive innovation, with a continued strong focus on product innovation,” he said in his keynote address titled, “Seizing the Moment for the Islamic Investment Industry: The evolving case of the Sukuk market”, at the Franklin Templeton Investments 2018 Islamic Forum here today.

Sultan Nazrin also said the global asset management landscape had been pushed to embrace new online investment platforms to meet the needs of an evolving client base that favoured these new distribution channels.

“Growing demand for low-cost, passive investment strategies and greater transparency poses unique sales and execution challenges.

“Failure to keep up with these changing structural dynamics could put the industry at an even greater disadvantage than at present,” he added.

He said that Islamic investors could also capitalise on the emerging “green” or environmentally-friendly finance.

According to him, Malaysia had taken the lead in this area when the country collaborated with the World Bank to launch the world’s first ‘Green Sukuk’ late last year, aimed at financing sustainable, climate-resilient growth.

The first-of-its-kind “Green Sukuk” was the result of years of research on the best way to address the gaps in Shariah-compliant green financing globally.

It provided a blueprint for pioneering fundraising instruments to meet the growing global need for more sustainable and responsible financing.

​“Sustained innovation is essential for progress and Malaysia constantly strives to be at the forefront in this area. We must keep ahead of the technological disruptions that are reshaping the way we live.

“Given this context, Islamic finance should fully embrace the new and emerging approaches to finance, while maintaining the core principles that set it apart from conventional finance,” Sultan Nazrin said.