November 20, 2008

Malaysia will further open up its Islamic finance sector to foreign investors, the central bank chief said on Thursday, as it faces increasing competition to retain its position as the leader in the global sharia bond market.A recent jump in Gulf oil earnings has drawn new players such as Hong Kong and Singapore into the Islamic finance industry which was once dominated by the Middle East and Malaysia.Mostly Muslim Malaysia wants to attract more foreign investment to become a global Islamic finance hub, specialising in the origination of sharia bonds, fund and wealth management and international Islamic banking and insurance.We are looking at our blueprint for liberalisation which will be announced in the very near term and this will be for both the liberalisation in the conventional as well as the Islamic financial system," central bank chief Zeti Akhtar Aziz told Reuters in an interview.As we are evolving Malaysia into an international Islamic financial hub, the liberalisation would be at a faster pace for the Islamic financial system.She said the blueprint would be launched before year end but declined to give any details. The measures would be part of a 10-year plan that Malaysia launched in 2001 to strengthen its financial system and encourage greater foreign participation in its economy.