Bursa Malaysia Calls for Listing of Islamic Banking Subsidiaries
Bursa Malaysia Bhd is urging financial institutions to consider the option of listing their Islamic banking subsidiaries, aiming to address the limited availability of shariah-compliant equity instruments within the financial services sector.
Bursa Malaysia’s Chairman, Tan Sri Abdul Wahid Omar, emphasized that while major banks in Malaysia operate with a substantial portion of shariah-compliant businesses, they are still conventionally categorized. He cited Maybank as an example, highlighting that over 60% of its total financing adheres to Shariah principles. Encouraging these banks to list their Islamic banking subsidiaries is seen as a positive step, although challenges might arise due to the operational intricacies tied to their current setup.
The chairman acknowledged that concerns like minority shareholders and related-party transactions need to be addressed should financial institutions decide to list their Islamic banking arms separately. In this context, he stressed the importance of developing new instruments that would enable the trading of Shariah-compliant equities within the financial sector.
Abdul Wahid urged market players to collaborate in increasing the availability of shariah-compliant equity instruments. He suggested designating certain shares as shariah-compliant shares and separating Islamic banking operations to ensure clarity and alignment with Islamic financial principles, thereby boosting investor confidence.
Looking ahead, Abdul Wahid expressed optimism regarding the Islamic equities market for the latter half of 2023. With global interest rates stabilizing, he anticipates a shift of investment flows from developed to emerging markets, including Malaysia and other ASEAN countries. This expected influx of investors is anticipated to strengthen both Shariah-compliant equities and the broader market.
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