Press Conference on the Islamic Capital Market Week

Speech by
YBhg Datuk Ali Abdul Kadir
Chairman, Securities Commission

12 March 2002
Securities Commission

Tan Sri Dato’ Ramon Navaratnam of Asian Strategic & Leadership Institute (ASLI)
Encik Mustapha Hamat from Islamic Banking and Finance Institute Malaysia (IBFIM)
Tuan Haji Che Min Che Ahmad from Jabatan Kemajuan Islam Malaysia (JAKIM)
and Dr. Nik Ramlah Mahmod, Director of Market Policy and Development , Securities Commission
Members of the press, ladies and gentlemen

Assalamu’alaikum wr. wb. and a very good morning to you.

Let me thank all of you for being here at this press conference on the Securities Commission’s (SC) Islamic Capital Market Week (ICM Week) which will be the single biggest public event on the SC’s 2002 calendar. The week which will run from Tuesday, 26 March to Saturday, 30 March will comprise many events and activities organized jointly by the Commission and several organizing partners, some of whom are here with us at this Press Conference. Before I go into details of the ICM Week programme, I would like to explain the relevance and importance of the Islamic capital market in Malaysia.

The Commission has always considered the development of an Islamic capital market as an integral part in the development of the capital market as a whole. In Malaysia, the Islamic capital market functions as a segment within the broader capital market. The Islamic capital market plays a complementary role to the Islamic banking and Takaful industry in broadening and deepening the Islamic financial sector.

The large untapped demand for Islamic financial products both locally and internationally, present opportunities for Malaysia to establish itself as an Islamic capital market centre. One of our aims, clearly specified in the 10-year Capital Market Masterplan (CMP) is to develop Malaysia to a status of an international Islamic capital market centre by introducing more Islamic capital market products and services, mobilizing funds more efficiently and putting in place a regulatory framework based on Islamic tenets.

One very crucial challenge and pre-requisite to the growth of the Islamic capital market is inculcating market awareness and understanding of its diverse investment opportunities. As you are probably aware, the Capital Market Master plan incorporates the Commission’s belief in promoting a learning culture and the creation of a pool of well-informed investors. One way of reaching out is through focused education and awareness programmes specifically targeted at the various industry players and participants who drive the industry.

It is mainly for this reason that we have organized the ICM Week, so that various levels of people in society, from students to muftis, to professionals such as fund managers to investors, can come together at specially-organized forums to discuss issues that matter to individual groups, but all bound by the common theme of Islamic capital market.

If you now allow me to walk you through the week-long ICM Week programme. You can see in the Press kit which has been distributed to you that the lead organizer for the ICM Week is the Securities Industry Development Centre (SIDC), the training arm of the SC. However, we are working very closely with our partners: ASLI, IBFIM, JAKIM and the Association of Stockbroking Companies, who have put in a lot of hard work to develop the programme and promote the event.

The flagship of the week-long programme is the Kuala Lumpur International Islamic Capital Market Conference, 26-27 March which is jointly organised by SIDC and ASLI. And we are pleased to inform you that the Prime Minister YAB Dato Seri Dr. Mahathir Mohamad has kindly agreed to open the conference, and launch the week-long programme. YAB Dato Seri will also deliver a special address on 26 March.

The conference itself will focus on the latest discussions on the opportunities, issues and the way forward for the Islamic capital market globally and for Malaysia in particular. Participants will gain a deeper insight into the developmental work that has been carried out in Malaysia with respect to the Islamic capital market framework and the investment opportunities available.

The conference will be presented by experts and professionals of Islamic capital markets from various countries including UK, USA and Kuwait, and we expect some 250 participants, both foreign and local, at this conference.

While the conference is the flagship, we have other significant events, to meet the different needs of other parts of society involved in the Islamic capital market.

We have organized with the cooperation of JAKIM, a Colloquium for Syariah advisors, Baitulmal officers, muftis and jurists. This happens on the third day of the ICM Week which is on 28 March. Participation is on invitation basis.

Concurrently, we are also organizing on the same day, a free forum entitled The Malaysian economy exclusively for fund managers who attend the first and second day KL International Islamic Capital Market Conference. While the forum focuses on investment opportunities, it will also discuss the challenges that confront Malaysia in the short and medium term and our policy responses to date. This forum will comprise three short presentations and concludes with an hour-long Question and Answer session. This would be an excellent opportunity for fund managers to communicate with key policy makers and regulators.

Another very interesting seminar during the ICM Week is the one on Islamic Financial Planning. We have all types of financial planning seminar but this is the first Islamic financial planning seminar as far as we know.

The seminar on 29 March which is open to the public for a small fee, will be organized by SIDC and IBFIM. It is titled Wealth Management According to Islam and will focus on the challenges and opportunities in Islamic financial planning and address its issues and common concerns. Participants will gain a much deeper insight and an appreciation of the Islamic investment opportunities available in Malaysia and how they can participate in fostering its growth.

As a finale to the week long programme, we have a free public seminar on Syariah Equity Investment and Islamic Indices on Saturday, 30 March. Three interesting topics will be deliberated including Syariah compliant investments, the performance of the Syariah Index and Islamic & Conventional Funds in Comparison.

The Islamic capital market has grown to a point where Muslim investors now allow professionals to manage their funds via the various Islamic Unit Trust Funds and Asset Management Companies. To benchmark the performance of the Islamic Capital Market, various indices were created. For instance, the RHB Islamic Index was introduced in 1996 and the KLSE Syariah Index, in 1999. The availability of the Syariah-approved list, the stock-broking services and the indices enable more individuals and corporations to participate in the Islamic capital market. We hope an understanding of all these indices will lead to a more dynamic and mature market.

Last but not least, I would also like to inform you that throughout the week, we will also have an exhibition at our Atrium, and talks in other parts of the country being planned with the ASCM. All these are free for everyone.

I expect the week’s programmes will be an eye-opener in terms of the public’s perception of how far we have progressed in developing this market. We are making the presentations practical so that it will provide useful information and as guide for all who would like to explore the opportunities in this particular market, either as professionals or as a means of building their financial wealth.

In that regard, we hope that the media will support the week’s events with your write-ups. We certainly welcome your help in promoting a greater participation in Islamic capital markets and in attracting Islamic funds to our shores. You are all also welcome to attend the public seminars and exhibition.

Thank you.