Franklin Templeton’s Mark Mobius recently attended the Global International Islamic Finance Forum (GIFF) in Malaysia and has written a blog post about Malaysia and Islamic finance in emerging markets. At GIFF, Mobius noted that Bank of Malaysia Governor Datuk Muhammad bin Ibrahim had reported that by 2020, total assets in global Islamic finance are expected to reach more than US $3 trillion. He also said that in at least 10 jurisdictions, Islamic banking today represents more than 20% of total banking assets. Moreover and in many countries, Islamic banking services are offered in tandem with traditional types of financial services and products.
For investors, the MSCI Islamic Total Return Index has largely mirrored the performance of the MSCI Emerging Markets Total Return Index since 2002 with some slight variations, while generally outperforming the MSCI World Index:
Mobius went on to note that if you look at the sector weightings of the MSCI Islamic Total Return Index versus the more general MSCI Emerging Markets Total Return Index, you will see significant differences. For example: Financials are much smaller in the Islamic Index, while consumer discretionary and energy are much higher for the same index. Country weightings also differ between the indexes:
To read the whole blog post, Malaysia and Islamic Finance in Emerging Markets, go to the Investment Adventures in Emerging Markets – Notes from Mark Mobius blog.
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- The Emerging Asia Pacific Capital Markets: Malaysia (CFA Institute)
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- Southeast Asia Set to Gain From Trade War Business Relocations (Nikkei Asian Review)
- Falling Oil Prices Puts a Spotlight on Malaysia’s Debt (Reuters)
- Emerging Market Risk Ranking: Most Vulnerable to the Strongest (FT)
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- Malaysia Can Draw Up to $33b in Rare Earth Investment Over Next 10 Years (Straits Times)
- What Happens if Malaysia is Removed From the FTSE World Bond Index? (The Asset)
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- GST: Asia’s Most Important Economic (Election) Talking Point? (SCMP)
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