Home >> Daily News >> Malaysia News >> Capital Markets >> India’s Reliance opens unit in Malaysia to tap Shariah market
||24 January 2010
India’s Reliance opens unit in Malaysia to tap Shariah market
Indian billionaire Anil Ambani’s Reliance Capital Ltd, owner of the nation’s largest mutual fund manager by assets, has set up a Malaysian unit to serve as a global hub for Shariah-compliant financial products, according to a report in Bloomberg news website.
Reliance Asset Management (Malaysia) Sdn. aims to tap the retail market for products that comply with Islamic law, and has started hiring people, an e-mailed statement from the Mumbai- based company said, citing Vikrant Gugnani, chief executive officer of Reliance Capital’s international businesses.
Ambani joins Templeton Asset Management Ltd. Chairman Mark Mobius in wanting to serve the international Shariah market from Malaysia, the world’s biggest center for Islamic finance.
Global Shariah-compliant assets under management may rise to $1 trillion by the end of this year, according to data compiled by Malaysia’s central bank in November.
Reliance is negotiating to manage up to $2.5 billion of public and government money, including some on behalf of Malaysia’s national pension fund, the Employees Provident Fund, the Economic Times of India reported today, citing unidentified people familiar with the matter.
Ambani is seeking to manage some funds for the Southeast Asian nation’s government, Malaysian Prime Minister Najib Razak said in an interview after a meeting with Ambani, according to the newspaper.
Shariah-compliant companies can’t run casinos or sell tobacco, alcohol, pork, or pornography, and their debt can’t exceed 30 percent of equity. Islamic bonds comply with Shariah law, which prohibits the payment and receipt of interest. Investors holding so-called sukuk get periodic payments drawn from an underlying asset that backs the securities.
Malaysia’s government and companies in the nation raised 32.2 billion ringgit in Islamic bonds in 2009, a 43 percent increase over 2008, according to data compiled by Bloomberg.
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below