Thursday 28 Mar 2024
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KUALA LUMPUR (July 26): Bursa Malaysia intends to proactively build new markets to serve as fresh growth avenues or solutions for its stakeholders, according to Bursa Digital Research.

In a note on Malaysia’s Islamic Capital Market (ICM) dated July 26 (Tuesday), Bursa Digital Research said examples of the new markets include products such as asset-backed securities and tokenised assets.

“Exciting initiatives in the pipeline include our work on establishing a voluntary carbon market with the first shariah-compliant carbon credit product as well as the commercialisation of a Digital Gold Dinar solution.

“Both new offerings are being developed and designed to fulfil the needs of the real market and drive the sustainability agenda in the capital market,” it also added.

This is in line with the bourse operator’s view on technology as an enabler, citing Malaysia’s finance industry as having experienced escalated progress because of technology.

“On this front, Bursa Malaysia continues to forge collaborations with various partners to enhance our capabilities and widen our pool of market participants,” it added.

The research house noted that Malaysia’s ICM has doubled in size over a decade with shariah-compliant assets amounting to RM2.26 trillion as at end-2020, having grown from RM1.1 trillion in 2010.

It noted that Malaysia’s ICM also weathered through Covid-19 with healthy growth having expanded from a total market size of RM2.04 trillion in 2019 to RM2.31 trillion in 2021, representing a compound annual growth rate (CAGR) of 6.5% for the period. “Presently, ICM accounts for more than 60% of the Malaysian capital market."

As at May 2022, Malaysia’s ICM capital market size stood at RM2.28 trillion, according to Bursa Digital Research.

Meanwhile, the research house also said the two Islamic digital banking licences issued by Bank Negara Malaysia (BNM) are expected to further accelerate Islamic digital banking that is aimed at servicing the underserved group.

“According to Global Islamic Fintech Report 2021, Islamic fintechs are projected to grow [to] US$128 million by 2025 at 21% CAGR, which is higher than the conventional fintechs, which are estimated at 15% CAGR for the same period,” it added.

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