ASEAN KEY DESTINATIONS
India’s Reliance to launch Islamic funds in Malaysia
India's Reliance Capital Ltd will launch Islamic funds in Malaysia in about eight months following an approval it got to set up an asset management company in the southeast country, Reuters quoted a top official as saying.
The move by Reliance, which owns India's largest mutual fund that had average assets of about $14 billion in October, is part of its plan to expand overseas.
Islamic investing forbids Muslims from receiving interest payments and taking a bet on companies involved in the production or sale of pork, alcohol, tobacco, pornography, gambling and non-Islamically structured finance or life insurance.
Nearly 180 Islamic mutual funds registered for sale in Malaysia and tracked by global fund intelligence firm Lipper managed about $5 billion at the end of October.
"We have got the approval to incorporate the AMC business," Vikrant Gugnani, chief executive of Reliance Capital's Indian mutual fund unit, told Reuters on Thursday.
Malaysia had earlier handed out Islamic fund management licences to Kuwait Finance House and DBS Asset Management, a subsidiary of Singapore's DBS Group .
CIMB-Principal Islamic Asset Management, a joint venture between Malaysian lender CIMB Group and U.S. firm Principal Financial Group has also received approvals.
Malaysia wants to be an Islamic finance hub, specialising in the origination of Islamic bonds, fund and wealth management and international Islamic banking and insurance.
The country has the world's largest Islamic bond market, with $66 billion or 62.6 percent of global outstanding sukuk, or Islamic bond, issuance as at end-June. However, it faces growing competition from financial centres in the Middle East and Asia as well as from traditional financial centres such as London.
Gugnani had said in June the firm was looking to launch emerging market and Europe-focused funds in the UK by 2009/10 and also to start an asset management business in Singapore in the next two years.
The firm also plans to expand operations to the Gulf countries.